Bitcoin dropped to around 35k from the previous 42k in just a day. It has been in a downtrend in the last two months overall from its all time high at around 68k back in November 2021.

Let’s take a look how is this effecting the network. Data on the numbers of transactions, new wallets, hash rate and the overall activity.

We will be looking at:

Total number of wallets
Active wallets
Hash rate
Number of transactions
Fees

The data presented here is mostly gathered from the blockchains charts.

Number of Wallets

Here is the chart for the total number of Bitcoin wallets created.

Bitcoin has around 81M wallets now. We can notice an increase in the last year or two but lets take a look at the last year for better clarity.

More new wallets were created at the beging of 2021 and we can see a slow decline since then. In the last period there is around 20k to 40k wallets created per day.

Overall, the number of new bitcoin wallets hasn’t followed the increase in price as much. One of the explanations for this would be that most of the newbies use custodial wallets, exchanges or some apps. Maybe the newbies are not going into bitcoin? Maybe just the big boys buy bitcoin, those are few, and most of the retail goes for other coins? I guess its probably some mix of all the above, but I still find it strange that the numbers of new bitcoin wallets don’t follow the price at all.

The yearly chart for new bitcoin wallets

We can see that the ATH for new wallets is in 2020 with around 19M Bitcoin wallets created in that year. In 2021 there is almost 17M bitcoin wallets created, even though BTC has seen a massive run in price especially in the first half of 2021. This again is showing that most of the new users are most likely going on custodial wallets.

Active wallets

How many of the are being used?
Here is the chart.

The record high numbers for active Bitcoin wallets per day was reached in December 2017 with almost 1M active Bitcoin wallets. A sharp drop in 2018 to the 400k daily active wallets, and a steady growth since then.

In April 2021 there has been around 900k, but not a new ATH, then a drop and a slow increase again to around 700k in the last day.

The numbers of active BTC wallets at least follow the price to some extent. But again we can see that the ATH for active wallets haven’t been broken from the last bull run, while the price has reached x3 from the previous ATH.

Transactions

The activity on the network is mostly represented by the number of daily transactions.

The transactions have been quite steady in the last years on the Bitcoin network with some down trend overall. This again indicates that more transactions are happening of chain.

We haven’t seen a new ATH for transactions per day. This number is around 400k. In the last period there is close to 300k transactions per day on the bitcoin network. For comparison ETH is around 1.2M and BSC is around 4M transactions per day.

Hash Rate

The ultimate Bitcoin value is the network stability and security. The network security in a proof of work chains is measured in hash rate, or how difficult is to mine. The bigger the completion, the higher the hash rate.

The has rate has been going mostly up, until June this year, when we can see a sharp drop. This is because of the ban on Chinese miners.

If we zoom in 2021 we get this.

At the end of June, the hash rate dropped below 100M TH/s, more than half from its previous ATH of 180M TH/s.

Since then, the hash rate has been recovering and has reached a new ATH in the last weeks of 200M TH/s. This shows the convictions of the Bitcoin miners for the network and basically most of them expect that the price will go up in the future.

Fees

A bit unpopular topic the fees.

The bitcoin fees are quite low these days, with only a few dollars per transaction. This especially when compared to Ethereum. We can see the increase up to 30$ per transactions back in April, but these days the fees are between $1 to $3 .

One of the key findings here is that bitcoin miners are bullish 😊. Let’s not forget that a lot of infrastructure and assets goes into mining bitcoin. Obviously miners keeps increasing there capacity and now the bitcoin network is more secure then ever. The hash rate has doubled from the period of the Chinese ban back in June 2021.

The other metrics, like wallets and transactions are quite steady and are not showing much correlation with the price, indicating that new users are either custodial or its mostly institutions and big players entering bitcoin, while retail looks for some other coins.

All the best @dalz

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