Bitcoin has once more stepped into the investment and trading limelight after the bitcoin price suddenly jumped last week, adding almost 30% and climbing back above the psychologically significant $5,000 mark—but leaving investors uncertain whether bitcoin (and other major cryptocurrencies) will be able to maintain the price.
The bitcoin price, which has been languishing around $3,500 per bitcoin for months, took the market by surprise last week when the price surged higher, leaving many analysts and traders unsure what exactly triggered the uptick, with little changed for bitcoin’s fundamentals.
Now, bitcoin has crossed a significant adoption and usage milestone with its 400 millionth transaction since bitcoin was created in early 2009, as recorded by bitcoin’s public blockchain.
Bitcoin is now averaging 350,000 transactions per day at around 15,000 transactions every hour, which is about four a second.
Though the record for the most daily bitcoin transactions was set back in the midst of bitcoin’s epic late 2017 bull run (at 490,000) the number of daily transactions has been steadily rising since mid-2018 after falling under 200,000 per day at the beginning of the year.
Meanwhile, the average number of bitcoin transactions per block hit an all-time high of over 2,700 transactions late last month, meaning th bitcoin network is processing more transactions each time a new block is mined.
The cost of each bitcoin transaction has also increased, however, with bitcoin fees doubling during the first week of April, to an average of a little over $2 per transaction, as the price surged and media attention around bitcoin and cryptocurrencies picked up. That average bitcoin transaction fee, which goes to the miner that “finds” the blockchain block the transaction is added to, has though now fallen back under the $2 mark.
As bitcoin, along with other major cryptocurrencies, continue to hit adoption and usage milestones investors and traders are likely to become more confident of bitcoin’s longevity and ability to hold on to higher valuations and prices.
“[Cryptocurrency] volumes have come down a bit from last week’s surge but are still about double what they were last month,” eToro senior market analyst Mati Greenspan wrote in a note to clients yesterday. “All eyes are currently on bitcoin, which is testing the upper end of its range.”
However, technical trading data suggests bitcoin could be heading for a sudden price fall despite adoption and usage milestones.