Crunching the Numbers
According to historical info obtained by The Block, the respective 30.12% and 39.15% movements of Bitcoin and Ethereum in the past year represent the lowest values since data gathering started in 2017.
The most Bitcoin transfers happened between March 2017 and 2018. Meanwhile, Ethereum’s peak activity was recorded between July 2016 and 2017 just a year after its network went live.
The chart below shows the active supply of both cryptocurrencies from 2017 to present:
The dipping supply of Bitcoin was attributed to the upcoming halving event expected to take place in April 2024.
Zooming out the charts reveals that the five-year active supply decreased from 83% to 70.13%. Zooming in on the three-year timeframe also indicates dwindling active supply from the peak of 73% in 2019 to the past three years’ 58.58%.
Additionally, network transactions have surged in the background pushing the fees up. This was fueled by the introduction of Ordinals clogging the network early this year—logging a record-high on May 12 and the protocol exceeding a total market value of $900 million. The Block’s analyst suspects that the rising transaction charges may be hindering the volume of transactions in Bitcoin, too.
Separate data by Dune Analytics revealed that BTC transaction charges have spiked from $779,649 at the start of November to $11.63 million three days ago. The figures translate to an increase of $1,391%.
The long “HODL” on BTC can be further credited to the anticipated resolution of the US Securities and Exchange Commission to the spot Bitcoin Exchange Traded Funds (ETFs) by financial powerhouses like BlackRock, Grayscale, Ark Invest, and Fidelity, among others.
As of this writing at 8:00 AM UTC time, Bitcoin is priced at $37,220—showing a 1.5% climb coinciding with the election of pro-Bitcoin Javier Milei as president of Argentina. The coin experienced reinvigoration in trading volume by 23.76% as its value swung from $36,414 low to $37,509 high.
Overall, the crypto community has a bullish outlook for Bitcoin, Ethereum, and other altcoins due to existing market conditions and the growing participation of traditional finance (TradFi) in the adoption of these digital assets.
The receding active supply of Bitcoin and impending increase in the difficulty of Bitcoin mining amid the aggressive hoarding of financial institutions shows a consistently rising demand for the digital commodity. As per the basic law of supply and demand, the latter exceeding the former can drive prices up, which reinforces the bullish case of the digital asset in the year to come.