Although Bitcoin has lost 83% of its value since december 2017, Bitcoin is far from dead. On the contrary! Here are just a couple of reasons why I am very bullish on Bitcoin in the long term.
Bitcoin Hash Rate
Due to the declining price Bitcoin miners began turning off their machines in the last quarter of 2018. The hash rate made a low in december last year, but is recovering since then. This means Bitcoin miners are coming back, even though the price of Bitcoin is still near the bottom. I think miners are expecting higher prices in the future.
Bitcoin Transactions per day
The chart below shows the number of Bitcoin transactions per day since Januari 2013. As you can see, there was a huge decline in early 2018, but the number of on-chain transactions are rising for over 6 months now. They are currently even back to the high 2017 levels.
Transaction fees
Transaction fees were a pain in the ass for Bitcoin a year ago, but are completely gone now as you can see in the next chart. Transactions with a fee of 3 Satoshis per byte are now being confirmed in the next block (within 10 minutes). Even with the number of on-chain transactions rising again, the fees remain low. This is mostly thanks to the adoption of SegWit and transaction batching of the exchanges.
Bitcoin Lightning Network
I expect a lot from the Lightning Network in the coming years. It is still in beta and still very small, but is growing rapidly. My last chart shows the number of open channels (yellow) and the sum of all bitcoins in these channels (green) over the last 90 days.
90 days ago the Lightning Network contained only 114 BTC and has since then grown to 662 BTC. Together with the number of open channels this is growing very fast.
I think we can conclude that the value of Bitcoin and all other cryptocurrencies were highly overrated a year ago. Far to much speculation without much real value. It was a big hype when everyone was suddenly talking about cryptocurrencies. Most of these speculators who expected to ride a lambo within a few weeks have now left the market. Bitcoin has always moved in cycles like this. The previous bear market lasted for about a year and was followed by another 9 boring months. This boring market was a time to accumulate and to build. I think we can now expect a couple of boring months with a Bitcoin price between 3,000 and 4,000 USD. Maybe 4,500 USD, but probably not much higher. The speculators who were causing huge price spikes are gone. The 'Smart money' is buying in this phase for the long term. I'm convinced we will eventually see a new bull market again. Short term speculators will come back as soon as they see Bitcoin making new highs again. It's just a matter of time...
SteemBlockExplorer.com - SteemNow.com - CoinMarkets.today
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It seems somebody with deep pockets has just read your article. BTC UP 300 USD.
Mooooon!
I agree that Bitcoin is not dead.
Thank you for the presentation showing both the cyclical nature and steady appreciation of Bitcoin. Few people remember that longterm holders of Bitcoin have experienced mostly appreciation of their Bitcoin while it’s mainly the speculators in the last Bull market that lost money. Your charts and words help to explain that. The true Bitcoin millionaires are still quite wealthy.
Additionally, I have been researching the commerce side of Bitcoin and during this Bear Market many ways of utilizing Bitcoin for daily purchase have been developed. At this point mechanisms exist to utilize Bitcoin like both a currency and a store of value exist and are functioning in North America, Asia and Western Europe. Worldwide trade volumes of Bitcoin as you point out are quite high as multiple countries experiencing inflation and a few experiencing hyperinflation have seen their citizens move from national currencies to both dollars and Bitcoin. In fact the digital nature and easy transport of Bitcoin rivals both dollars and gold. We are living in the future stages of a revolution in the way people store value.
Lastly, the preparations by Institutional Investors like Nasdaq and Fidelity to make it possible for cryptocurrency naive investors to invest large sums into Bitcoin, with cold storage and institutional methods of securing private keys not unlike the institutional storage of stock certificates has not gone unnoticed and also indicates the coming investment of large individual and institutional monies into Bitcoin, in my opinion and this opinion is held by others in the cryptocphete.
Bitcoin is far from dead, it will be a permanent part of the financial landscape for years to come.
It will I believe facilitate the similar adoption of other altcoins like our beloved Steem.
@shortsegments
Oh i agree my niggaaa, upvoted 100% and resteemed and bitcoin LOGARITHMIC chart is what really shows the full picture
Absolutely!
Thanks for the resteem and upvote :-)
It will be interesting to see what coins stay, fall, and enter the top 20 in the next year. I think bitcoin will firmly stay #1, but could definitely see a few falling out. Its nice to be in crypto right now knowing that even with the low prices projects in cryptos are still being developed tested and implemented. Cant wait to see the full effect of the lighting network.
I think we are just experiencing the opposite effect of the euphoria from 2017 as it is proven that markets can remain irrational and inefficient for extended periods of time.
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It is happening as we speak. You are a visionary.
The term "Bitcoin is dead" came from short sellers. Fuck those guys! Bitcoin is here to stay, 1000$ ,10000$ or 100000$!
Agree in everything but trust in lightning. Think altcoins like dash will take over(after the next Bull run).
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Nice take and nice graphs.
I hope you are right but there is definitely Something cooking !
Take care.
@penguinpablo, well written article.
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Thanks for the upbeat news and attitude. I really need some positivity in my life right now!
BTC is not dead, but it looks like it is also not alife.
I love this post, nice information! :)
Your data sources are impressive.
Thanks for sharing this analysis.
Bitcoin is not dead, and will never die!
Thanks for the post ans the relevant charts
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