Bitcoin Transaction Volume Spikes to Historic Levels

By Andy Hao


Most of July has been characterized by see-sawing Bitcoin prices and broader uncertainty over Bitcoin’s short to medium-term future. Will the Bitcoin rally resume through the summer of 2019, or will prices head back down towards their lows of this past winter?

So far, nobody seems to have a clear indication of what prices might do next. And the best way to illustrate that uncertainty is to examine transaction volumes on the Bitcoin network. Using Coinmetrics adjusted transaction volume metric, we can get a sense for how volatile network activity has been recently. 

On July 28, the Bitcoin network had its lowest transaction volume recorded in the past 2+ months. Only $1.11 billion of economically useful transactions were processed on the Bitcoin network.  

One day later, on July 29, the Bitcoin network had its highest transaction volume recorded since January 2018, with over $6.3 billion of economically useful transactions processed in a single day.

The distinction between adjusted tx volume and raw tx volume removes non-productive internal transactions like exchanges sending money back and forth between their own hot or cold storage wallets, while still considering all external transactions. Adjusted transaction volume is thought to be a better metric for analyzing real levels of activity on the Bitcoin network, though it’s worth noting that even the adjusted tx volume metric is not a perfect representation of Bitcoin’s usage.

Either way, it’s interesting to observe the wild swings in adjusted tx volume. There has never been a day in Bitcoin history where adjusted tx volume has jumped over $5 billion in a single day. That is, until yesterday. Now investors should be asking whether this rise in adjusted tx volume will continue, and whether Bitcoin prices will rise alongside the increase in transaction volume. Only time will tell.

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