Bitcoins worth $634 billion traded in 2019 but market buzz is that it's mutating again

Bitcoin trade at $1.7 billion every day, the cryptocurrency faces the prospect of mutating again due to Lightning Network

Bitcoin Pixabay

Bitcoin would only consist in the majority of purely speculative transactions on its network. But when we look at the details of the $634 billion traded on its blockchain over the last four quarters, the picture may seem much less bleak.

According to a report from The Block along with data analyzed in consultation with the team of Coinmetrics, Bitcoin is mutating: the value that transits through its network is thus in sharp increase, but the use that is made also changes.

Various metrics can be considered in terms of the use of the Bitcoin network (BTC) and view these developments. As a reminder, a little over a year ago, Coinmetrics had already taken an interest in this problem. Their conclusion at that time was final: In 2018, more than 2/3 of the transactions in bitcoins would have had "no economic value".

Thereafter, the study of The Block also looked at these volumes of transactions, over one year, which was the equivalent of $634 billion worth bitcoins that exchanged on the network, an average of $1.74 billion per day. However, the study does not take into account the "real economic value" of these transactions in the immediate future.

During the low market phase on BTC prices in December 2018, the volumes exchanged had decreased briefly, but they have since experienced a continuous increase in recent quarters.

Between the first and second quarters of 2019, the volume of Bitcoin traded increased significantly by +108%, reaching $192.4 billion. And while the increase is less significant between the second and third quarters of 2019, by about "only" +18%, the network still reached $227.6 billion worth of bitcoins traded in 3 months.

Half of transactions were less in value

The team that studied this research then questioned the importance of speculation as an engine for using the Bitcoin network. To answer this tricky question, it is about knowing how to distinguish the types of users, or at least the different behaviors observed on the blockchain. In terms of gross average, the average amount of a Bitcoin transaction stands at about $6,887 over the past year.

However, let us not forget that this is a simple average, and not all averages are often misleading. Indeed, the heavy transactions carried out by certain speculating whales, or – more surely – by the exchanges themselves, could very well distort the analysis.

FILE PHOTO: A coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustration picture, October 26, 2017. Reuters