Bitcoin Transactions Are At All Time High
Mainstream media’s coverage has been focusing recently on Bitcoin’s declining price but have ignored the fact that bitcoin transactions have hit an all time high during the same period.
Recently bitcoin prices sunk to a recent low of $185 on January 15th. However on the next day, there were a record 115,787 bitcoin transactions.
I have long maintained that when bitcoin transactions increase, the bitcoin price will stabilize. But this recent data seems to contradict my hypothesis, so what gives?
I have two theories.
First, while bitcoin transactions are at an all time high, the volume is still insignificant compared to overall daily financial transactions. For example, there are 100 million automated teller machine and point-of-sale transactions each day in addition to 60 million credit card transactions. I believe that bitcoin prices will stabilize once bitcoin transactions increase beyond a rounding error to become a meaningful proportion of all financial transactions.
Second, the relatively small Bitcoin ecosystem is especially sensitive to pricing volatility. As far as anyone knows, there was no catalyst that caused bitcoin to drop from $300 to $185. Applying basic economic theory, if demand is up but prices fall, there must be excessive supply coming into the market. Maybe the supply is coming from miners needing to monetize their bitcoin to pay bills?
Regardless of what is driving bitcoin prices lower, that should not obscure the fact that that the number of bitcoin transactions have been steadily climbing since July of 2012 and consistently reaching new records each day
Tags: Bitcoin
Categorised in: Blog
1 Comment
The number of transactions per day are still rising. They have more than double to date to 230,000 approximately since May 2015. There seems to be no data respects the part of the world where they are rising.