The month of March has been tough for several industries across the globe and one of the areas that have been affected is the cryptocurrency market. A price drop that occurred earlier within the month was quite significant. Fortunately, the market has been slowly recovering from that drop and it should be back on track sometime this month.
Despite the impressive recovery of the crypto market, there have been some rather unusual reports regarding the decline in Bitcoin network activity. Daily Bitcoin transactions have been on a steady decline leading experts in the field to look into the matter.
As it turns out, there are several changes that have been noted concerning how Bitcoin, which is arguably the most popular and most widely used digital currency, is being used. While it may seem like a temporary anomaly that will blow over after a while, the plunge in network activity may be a reflection of a greater long-term trend. So, what is going on?
How It Started
Well, since the year rolled around, daily transaction activity grew at a pretty impressive pace and this was partly attributed to the increase in the price of Bitcoin. Both trading and mining picked up pace adding to the number of daily transactions.
However, an abrupt turn in the global economy earlier last month as the coronavirus pandemic spread across more countries affected the crypto market. Crypto prices fell and transactions began to dwindle. Daily transactions fell from over 350k to less than 275k and the number Is expected to fall even further going forward.
Bitcoin Holders Are Hodling
People who own or hold Bitcoin have since pulled thousands of their currency from exchanges and are now trading way less than they used to. Many of them are now only interested in keeping their crypto safe in personal wallets.
The decline in trading and network activity is not the only proof of this fact. There has been a recent uptick in the number of Bitcoin wallets and address diversity. As it stands, there are over a hundred thousand additional addresses compared to what was the case at the beginning of March.
A Win for Bitcoin?
While the decline in network activity is definitely something that people need to be concerned about, it might actually be a win for the crypto industry especially Bitcoin, in this case. The fact that people are keeping or holding their currencies is proof that the digital currency has matured enough to be considered as a health and safe store of value.
The global pandemic is wreaking havoc on the world’s economy and this makes Bitcoin a safe haven for lots of people. Its value is also now bound to go up as there will be very little supply.