Increase In Number Of Active Bitcoin Addresses
There has been an increase in the number of active Bitcoin (BTC) addresses, breaking an important plateau. Previous numbers indicate that such a scenario would cause a parabolic bull run. The last time the number of active bitcoin addresses exceeded 1 million was in June 2019. At the time, the price of BTC had eclipsed $13000, which was the highest it had been since the 2018 price dip. However, on May 7, the number of active BTC addresses once again exceeded 1 million.
Before the June 2019 rise in active addresses, the only time there were this many active BTC addresses was during the historic 2017 bull run. During this period, the price of BTC exceeded $20000 before stabilizing at $19000. However, the increase in price did not last long, as 2018 saw a gradual dip in price, followed by a reduction in the number of active BTC addresses.
Interest In Bitcoin Surges
The relationship between the increase in this number of active addresses and increase in price of BTC can be explained on an intuitive level. An increase in number of active wallets is an indication of greater adoption of BTC and activity on the bitcoin address. An increase in adoption on BTC will lead to an increase in price, as the activities on the network are more. Thus trading volumes will be more than previous periods.
The interest in BTC can also be attributed to the heightened interest in the Bitcoin halving happening in a few days. Google searches for this term have increased over the last few weeks, with many people interested to understand its meaning and impact. Therefore, there might be a number of newbies interested in capitalizing on the anticipated increase in price of BTC, while hodlers are checking to see if the value of their coins will increase in case the halving causes a bull run.
Paul Tudor Jones, a famed hedge fund manager also made news when he claimed to be hailing Bitcoin as a hedge against fiat inflation. Such news trigger the blockchain community to act, which can cause such increases in number of active addresses.
This data on number of active bitcoin addresses is from Glassnode and is not specific on the details of the addresses. As such, the amount of BTC in each individual address is not considered in the data. The chart from Glassnode therefore treats all data the same; an address with 1 Satoshi and another with 1 BTC are all treated equally.
Image courtesy of Flickr