Bitcoin Total Addresses See Rapid Growth, Sign Of Adoption?
On-chain data shows that the total number of Bitcoin addresses has seen rapid growth recently, a sign that adoption may be accelerating.
Total Bitcoin addresses grew by 3.95% during the last two months
According to data from on-chain analytics firm Holy, BTC now has a total of 45.14 million addresses. The relevant indicator here is the “BTC Supply Distribution”, which tells us which groups of wallets in the market include how many addresses at the moment.
Wallet groups here refer to cohorts divided based on the total number of coins they are currently holding. For example, the 1-10 coin group includes all addresses that currently carry a balance between 1 and 10 BTC.
If the Bitcoin Supply Distribution metric is applied to this group, it will measure the total number of such wallets in the market that meet this condition.
As in the current case, the amount of interest is the total number of addresses in the entire network, regardless of wallet value, Santiment simply merged all existing address cohorts to show their combined Supply Distribution.
Here is a chart showing the trend of this indicator over the past year:
Looks like the value of this metric has rapidly gone up in recent days | Source: Santiment on Twitter
As shown in the chart above, the total number of addresses between 0 and infinity BTC (i.e., a range that encompasses wallets of all sizes in the market) had been seeing sharp growth for about a year now, when the bear market was just settling in.
This suggests that new addresses were still being created at a rapid pace at that time. Whenever this type of trend is observed, it means that a large number of new users are possibly joining the network and therefore, cryptocurrency adoption is increasing.
However, when slumps like those triggered by the LUNA collapse and the 3AC bankruptcy rocked the market and a bearish transition took place in full swing, growth slowed and the indicator even encountered large chunks of sideways movement.
Typically, investors find consolidating markets boring, so activity slows down during bear markets when price shows this trend. Naturally, the network has difficulty attracting new users under these conditions, so the increase in total addresses also stabilizes.
On the contrary, volatile movements are exciting for holders and therefore draw a lot of attention to the blockchain, which ends up attracting new users to the cryptocurrency. An example of this is clearly visible during the FTX slide on the chart, where addresses suddenly jumped in a period of slow growth.
With Bitcoin’s last rally in recent months, the value of the indicator has again shown a sharp increase, implying that many new users are being attracted to the asset now.
In this period alone, the total number of addresses grew by almost 4%, a notable increase in such a short period of time. More adoption is generally a positive sign for any coin, as it provides a sustainable foundation for long-term growth.
BTC price
At the time of writing, Bitcoin is trading around $24,900, up 15% over the last week.
BTC has stumbled since the rise above $26,000 | Source: BTCUSD on TradingView
Featured image of André François McKenzie on Unsplash.com, charts by TradingView.com, Santiment.net