BTC/USD: Bitcoin's activity level may be increasing, but its number of active wallets is not.

Due to the recent BRC-20 frenzy, Bitcoin blockchain activity has been increasing. This year, between mid-April and mid-May, the 7-day moving average of daily Bitcoin transactions increased by 89%, from 309,000 to 586,000, in just one month.

Native solutions for NFTs and issuable tokens on the Bitcoin network have boosted activity, but both of these technologies were only recently implemented and are still in the experimental phase.

Despite the increase in Bitcoin transactions, analysts have observed a significant decline in the number of active Bitcoin wallets since the middle of April. Since the summer of 2021, the number of Bitcoin wallets used to transmit or receive funds has reached its lowest point. Some have also attributed this to the popularity of BTC NFTs (or Ordinals) and BRC-20s, which have contributed to the increase in network interaction fees.

A fresh start for Bitcoin?

Bitcoin has now attained its weakest correlation with Ethereum since two years ago, a phenomenon not seen since 2021. With a 77% correlation last week, the two largest cryptocurrencies in the world are no longer moving in tandem as they did for the majority of last year. Analysts attribute this to the fact that investors view Ethereum as an emergent market following its transition to PoS, while Bitcoin is increasingly viewed as a hedge asset.

Regarding Bitcoin

Bitcoin is the first decentralised digital currency; it was created in 2008 by an unidentified individual or group using the alias Satoshi Nakamoto. It operates on a decentralised peer-to-peer network, which eliminates the need for intermediaries such as banks. Bitcoin employs cryptography to secure transactions and regulate the issuance of new units of currency. Transactions are recorded on a public ledger known as the blockchain, allowing anyone to confirm the legitimacy of a transaction and the ownership of bitcoins. The entire supply of bitcoins is capped at 21 million, which is anticipated to be exhausted by the year 2140. Bitcoin's price has experienced numerous boom and bust cycles over the years, as it is extremely volatile.