As the world of cryptocurrencies continues to garner attention, an interesting milestone was achieved earlier this week. Data from on-chain analytics tool Glassnode revealed that the number of individual wallets holding at least one bitcoin (BTC) crossed the millionth mark on Monday. Impressively, this figure represents a 20% increase since February last year.
Despite broader market conditions weighing down BTC prices, it appears that long-term sentiment for the tokens remains strong. Between November and January, amid the collapse of crypto exchange FTX, the number of bitcoin wallets holding one token grew by 79,000. At the time, BTC prices fell from over $22,000 to briefly under $16,000.
Although the recent rise of Bitcoin Request for Comment (BRC-20) tokens has contributed to an increase in the overall market cap, it has not played a significant role in the growth of BTC wallets. Since the BRC-20 token standard’s launch in March, only 30,000 new wallets holding one bitcoin have been added.
These standards have allowed developers to issue tokens on the network, and build decentralized finance (DeFi) services such as lending and borrowing. Consequently, fees on the Bitcoin blockchain have surged to two-year highs amid the demand for block space, with altcoins issued on Bitcoin reaching a cumulative market capitalization of as high as $1.6 billion earlier this month.
However, there is a point to be raised: despite the large holder figure, most of the current bitcoin transactions appear to be from smaller wallets. Tom Rodgers, Head of Research at ETC Group, noted that “during the last peak in 2019, most Bitcoin transactions skewed towards larger transactions, in the range of $1,000 to $10,000.” Rodgers further elaborated that “this suggests most Bitcoin users were using the blockchain for trading.”
Last week, the landscape seemed to have changed significantly, with a total of 359,560 transactions coming from those valued under $1. According to Rodgers, this indicates “a huge increase in Bitcoin velocity — or the amount of Bitcoin being transacted by users, instead of being locked up in cold wallets and held over the long term.”
In conclusion, the resilience of bitcoin wallet holders and the increased transaction velocity highlight the evolving dynamics of the cryptocurrency market. Despite external influences such as market fluctuations and broader economic forces, the enthusiasm for bitcoin and its underlying technology demonstrates the potential for a future deeply intertwined with blockchain.
Source: Coindesk
