Bitcoin network activity is buzzing. And that’s driving a healthy uptrend in transaction fees.
Select on-chain metrics shows the world’s oldest crypto still has the juice to compete with younger chains on the block, including on a per-transaction basis.
Using a 50-day simple moving average (SMA) to track the total transaction count on the Bitcoin network, the metric is now at its highest point in more than two years, data from CryptoQuant shows.
While there have been outliers based on specific days (see just after FTX’s demise), the moving average helps to smooth out inconsistencies in the data, providing a clearer picture.
The last time transactions had clocked a 50-day SMA transaction count above 318,000 was on Feb. 28, 2021 — at a time when bitcoin (BTC) had just completed its first run up near $60,000.
In almost every instance in the last two years, bitcoin has crossed an average count of 320,000 transactions on its network, price has followed suit in a big way.
Looking at first quarter performance in 2019, bitcoin rose from $3,732 on March 4 to $5,300 on April 30 only after transactions had crossed the given threshold. The same occurred again two years later when prices jumped from $34,000 on Jan. 12 to $57,000 by Feb. 21.
There are exceptions, of course, including in February and August 2020 — though in both those instances the 320,000 count preceded strong run ups in bitcoin’s price.
Transaction fees paid to bitcoin miners are up about 70% year-to-date, an important metric for network security over the long term in the face of declining block rewards due to the quadrennial halving.
Another metric used to judge the buzz of network activity includes daily active addresses. Data shows, again using a smoothed moving average, the figure stands at five-month highs.
“Key on-chain metrics, such as daily active addresses, addresses with a non-zero balance, and unique on-chain entities holding at least one BTC, all evince the growing adoption of Bitcoin as a store of value and means of payment,” market analysts at Bitfinex told Blockworks via email.
Bitcoin inscriptions are helping to drive some of that activity, though interest has likely been due to several factors, including market structure.
Those include the tailwind effects of the US banking crisis, uncertainty in macroeconomic conditions and renewed investor interest in digital assets with a return to confidence.
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Source: https://blockworks.co/news/bitcoin-network-activity-price