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Despite Negative Price Action, Positive Fundamental Growth of Bitcoin Recorded in 2018-19


Bitcoin transaction volume is a clear technical indicator informing about the fundamental usage of Bitcoin.  The transaction volume had decreased drastically since January 2018 recording below 150,000 transactions in each block. Nevertheless, the transaction volume has gained traction and has again reached the Q4 transaction volume of 2017.

Fundamental Growth of Bitcoin

The chart suggests that the rise since June 2018 in the transaction volume of Bitcoin has been steady. Despite the adverse price action since November 2018 dragging the price from $6400 levels testing $3200 level as the bottom, the transaction volume is on a consistent rise.

Graph of the number of transactions Recorded in each Block

If we neglect the isolated incident of an unprecedented rise and a rather unusual crypto-activity in December 2017, the price comparison of the above mention period also reveals fascinating similarities. The price during Q3 of 2017 was hovering the $3000 – $4500 range. Moreover, during the last two quarters of 2017, the concerns regarding scalability had haunted the BTC transactions. Due to the increase in volume, the transaction fees reached an all-time high and the time taken to incorporate blocks exceeded 10 minutes. 

Graph of number of Bitcoin Transactions per Block

SegWit and Lightning Network (LN) Improve Scalability

The adoption of SegWit and Lightning Network in the Bitcoin has improved the transaction capacity of Bitcoin. The same number of transactions per block recorded during July-September 2018 are being solved in a considerably lesser time. In January 2019, a cryptocurrency independent researcher Kevin Rooke highlighted a significant improvement in Bitcoin, I.e., reduced transaction fees to 2015 levels. 

All-Time Price of Bitcoin on a logarithmic scale

Despite varying apprehensions, delayed regulations and price drop affecting Bitcoin, the use and transaction capability of Bitcoin keeps on improving. January 9, 2019, marked the tenth anniversary of Bitcoin. Despite the price fluctuations over the years, the graph of Bitcoin Price on a logarithmic scale implicates consolidation and long-term HODLing. These indicate sound technical and fundamental growth for Bitcoin undeterred by the adverse price action.

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