Bitcoin's fundamentals are strengthening despite price decline

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Bitcoin has become stronger as the price has declined.

Since December 2017’s all-time high, Bitcoin is down ~80% to $4,000. Mainstream media is screaming that “Bitcoin is dead!” and the Twitter trolls are taking victory laps at the perceived demise of the “ponzi scheme.”

Fortunately, nothing could be further from the truth. The fundamental drivers of the decentralized technology network are actually growing. Here are key data points:

  1. The number of Bitcoin blockchain wallet users continues to increase dramatically over the last two years.

  1. The cost per transaction continues to decline through 2018.

  1. The total number of transactions is increasing over the last two years.

  1. The number of confirmed transactions per day has increased since February 2018.

  1. The number of transactions per day excluding the popular addresses is also increasing through 2018.

  1. On a linear scale, the hash rate has approximately quadrupled in the last year or so. The hash rate also continues to look healthy on a logarithmic scale.

  1. There has also been a 98% increase in the number of Bitcoin nodes running over the last two years, according to Bitnodes.

Price is only one measurement of value for an asset. While it is important, it is not an important measurement of future value. The underlying fundamentals for the Bitcoin blockchain appear to be growing stronger despite the decline in the current price.

Don’t be distracted by the noise. Focus on the fundamentals. Bitcoin isn’t going anywhere.


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