Change is a strange thing. It looks like it happened overnight. But the catalysts for these changes did not appear randomly. They are sown, nurtured and grown over time. This is as important for technology as it is for social, political and personal change (change). In 2017, when people couldn't help but talk about Bitcoin on CNBC and Twitter, it felt like we were in"change"the edge of. The post-dollar economy is finally here. Many learned in 2018 that change has yet to come. Most of what we've seen is a roughly 30-fold increase in the price of Bitcoin in a little over a year (November 2016 to December 2017). We may be at the same point in history again. Or maybe not.

Quite a few people on Instagram have started mentioning Bitcoin, ecosystem influencers have appeared on CNBC, and JPMorgan Chase believes that Bitcoin is digital gold for millennials. My gut says the price is likely to go up and then crash. Some create intergenerational wealth. And some will go bankrupt. Bitcoin has to be seen for what it is and not seen as a get-rich-quick scheme. P2P, anti-censorship, hard currency, has a pre-set currency system maintained by proof of work. As we once again enter a period of rising prices, it may be useful to explore the state of Bitcoin below in terms of wallet activity, on-chain metrics, and new developments.

Bitcoin hits all-time high for on-chain transaction volume

Bitcoin's usefulness as a unit of currency is largely determined by the number of people using it as a store of value and how often they trade the asset itself. The simplest measure is to look at the transaction volume on the chain. While the price of Bitcoin itself fluctuates from year to year, exploring dollar-denominated transactions helps us measure it in a stable unit. The Coin Metric data (USD-adjusted transfer value) is used here as a reference. Since 2017, the on-chain transaction volume has been higher every year. This is interesting because a year like 2018 has had very little real market activity. We have also witnessed the rise of stablecoins being used for value transfer. My take is that Bitcoin is still being relied upon as the preferred way to move large amounts of money. The reason I think so is because the average transaction on the Bitcoin blockchain today is above $50,000. For a stablecoin like USDT, the same figure is around $10,000. Considering censorship resistance and immutability, people with huge assets still prefer Bitcoin for large transactions.

More than 0.01 Bitcoins are held in more than 8.5 million wallets

To understand how Bitcoin's user base is growing, we split it into individual and whale wallets. This allows us to understand how the ecosystem has evolved over time. If the individual is not participating in the ecosystem, it means there is no"New currency"Or the adoption rate appears. If there is a sharp decrease in whale wallets, it could be a sign of a lack of faith in Bitcoin’s currency. The data here speak for themselves. We found that among small wallets (0.01 and 0.1 BTC) there has been a continuous increase since 2017 and new highs have been made. In fact, the number of daily active wallets reached an all-time high on November 18.

Whale Wallet presents an amazing asset swap, from someone holding 100 BTC to someone holding over 10,000 BTC. 100 bitcoins are equivalent to more than 2 million US dollars. Naturally, given that this is a fortune for the individual"change life"Individuals would tend to take profits around these levels. And that is likely what has happened. Conversely, those holding more than 1,000 Bitcoins have reached new all-time highs. The rapid surge of wallets holding more than 1,000 bitcoins makes me believe that large funds and institutions have indeed come, and it is a stage of rapid accumulation. As of November 25, there are already 2,228 wallets holding more than 1,000 bitcoins.

Half a million bitcoins left exchanges in 2020

The amount of Bitcoin held on exchanges has tripled since 2017. The reason may be the increase in the number of hedge funds focusing on digital assets today. These institutions are justified in keeping some of their holdings on exchanges so that they can be converted back to dollars if needed. As of November 25, the total number of bitcoins held in existing exchange wallets has dropped from 2.9 million to 2.4 million. This trend is likely to only increase as more bitcoin investors view it as a store of value rather than a speculative tool. With players like Paypal and DBS entering the game now, this chart may look fundamentally different in the next update, depending on how they choose to enable escrow and withdrawals. You can use Entropy to see how Bitcoin has moved between exchanges over the past few years.

40% of Bitcoin Supply Hasn't Moved in 2 Years

Combined with the fact that more than 500,000 bitcoins have been moved out of exchanges, another interesting number is that the number of untouched bitcoins has been rising. It is a measure of what percentage of bitcoins have been sitting idle in wallets. As of Nov. 25, 44% of the bitcoin supply has not moved in the past two years. For more information about this indicator, you can go here (https://unchained-capital.com/blog/hodl-waves-1/) to learn about it. This figure directly contradicts the notion that Bitcoin's essential use is for criminal-related transactions or to facilitate money laundering. A large percentage of people on the network are simply holding assets in idle wallets. Given the fees involved in conducting transactions on Bitcoin, individuals may view Bitcoin more as a store of value than a payment network. Regular bitcoin holders may use it as a hedge against inflation and as another investment vehicle. The following sections explain why this happens.

99.70% of UTXOs are profitable

in the bitcoin ecosystem"HODL"Probably based on an idea. There is anecdotal evidence that profits can be made simply by buying and holding assets. The percentage of profitable UTXOs is a measure of the approximate number of people on the Bitcoin network that are profitable. They check the spread between the current price and the trading time. Historically, they've been a good measure of market tops -- because the closer you get to 100% for this measure, the more likely you are to reach an all-time high. In this case, the only way people can actually lose money is if they trade repeatedly on an exchange or get liquidated using leverage.

Bitcoin Velocity Marks Bitcoin's Use as a Store of Value

Another signal of changing perceptions of Bitcoin is the velocity associated with it. Velocity is defined as the monetary value of an asset in circulation on the chain divided by the market value of that asset. This indicator shows the trading volume of an asset on a given day. For Bitcoin, this value is 0.018. Tether is 0.13. The comparison itself is not fair, as transaction fees on Tether are a fraction of the cost of transaction volume on Bitcoin. However, it is fair to say that more and more individuals are using Bitcoin where decentralization, immutability, and censorship resistance are paramount. Stablecoins, on the other hand, are seen more as an alternative to traditional fintech means of payment. This makes me wonder if the potential market for stablecoins is much smaller than I first thought.

Stablecoin Supply Ratio Trends to New Lows

The Stablecoin Supply Ratio (SSR) in Bitcoin is a measure that compares the purchasing power of Bitcoin and stablecoins in the ecosystem. It divides the supply of bitcoins by the value of the stablecoin expressed in bitcoins. This number can increase rapidly when the price of Bitcoin rises and the stablecoin supply stagnates. Likewise, when the stablecoin supply increases significantly while the price of Bitcoin remains constant, this number decreases. One way to interpret this data is as a measure of people's appetite for volatile assets rather than risk in the dollar itself. Another approach is as an indicator that one unit of the stablecoin can buy bitcoin. A drop in SSR value usually indicates that the purchasing power of stablecoins in the market today is decreasing. This could change if there is a market correction in the price of Bitcoin and the stablecoin supply remains at its current position of about $25 billion.

Since 2018, Bitcoin transaction volume has increased by 4 times

A large part of what drives interest in Bitcoin is its trading on the open market. Individual users often unknowingly and endlessly observe its volatility and use this path to understand the macroeconomic impact of the world we currently live in. Transactions are essentially what Bitcoin attracts businesses and individuals to the new monetary system"selling point". That's why it's important to keep an eye on Bitcoin's volume in the spot market. On the one hand, it shows the number of individuals active in its market as speculators, and on the other hand, it represents the numerous large financial institutions currently serving the industry. In terms of the year, Bitcoin is about to usher in the most successful year for spot trading volume, with a trading volume of about 8.7 trillion this year. In 2018, the same figure was only $2.2 trillion.

Bitcoin value on Ethereum hits $2.5 billion

This graph may annoy at least some of my readers, but given Bitcoin's role as a store of value, its use in DeFi is important. Porting Bitcoin to Ethereum's smart contracts enables individuals to generate income and use it for productive activities rather than sitting idle. More importantly, it establishes a standard reference rate for lending bitcoins. As of now, platforms like Blockfi and Nexo offer bitcoin lending marketplaces, but they are centralized. And as we saw with the recent collapse of Cred, the lack of information about how they handle these assets can have disastrous results for users who rely on digital assets for banking. The amount of Bitcoin in DeFi can be used to measure the need to build new financial services for ordinary individual users in frontier markets such as India. It won’t be long before we see a new generation of lending, remittance, and derivatives instruments combining Bitcoin and Ethereum for this market.

Bitcoin exemplifies what is possible when human ingenuity and limitless innovation occurs at scale. Perhaps in the future, we'll see a similar pattern play out with other pressing issues such as education reform, health care, and agricultural technology. After all, money isn't the only thing modern society needs to change.

Hope this article helps you as you discuss with your friends about cryptocurrencies and the ongoing rally in the market.