Bitcoin Fundamentals Hit Highest Levels Ever

Bitcoin has been hovering around the $10,000 mark for much of September, peaking at nearly $10,900 before dropping dramatically back down. The volatility is still there, though the price seems set to take a positive trend and many are predicting that this is just the beginning of a bullish market.

Investment in Bitcoin has always been a speculative and volatile affair, leading many to believe that there is nothing solid behind the cryptocurrency market. Proponents of Bitcoin would tend to disagree. Though cryptocurrency exists in the digital world, adoption and the fundamentals of the technology are what give it value.

Volatility and Adoption

Volatility is one of the factors that is known to hinder the widespread adoption of Bitcoin and other cryptocurrencies as payment methods. As long as the market swings wildly, retailers will be sceptical of the problems the currency could present in terms of transaction times and exchange rates.

Bitcoin has come to represent the entire crypto market, albeit a market that is still emerging. Although there was more stability in 2018, the recent bull rally has shown that instability is still ready and waiting.

Despite this, adoption is occurring at all levels. The number of BTC addresses is already increasing and, as we will explore soon, so are the number of transactions and outputs. A greater number of companies now offer crypto services, from casinos using the technology on front desks, to companies like Microsoft and Expedia accepting payments. Corporate interest has also increased, for better or worse, with Facebook, J.P. Morgan and Walmart all potential space disruptors.

Bitcoin Fundamentals At All Time Highs

_{Caption: Bitcoin mining hash power has recently reached all time highs.}

Adoption is certainly one area that improves the value and sustainability of the Bitcoin ecosystem. The fundamentals of the technology and the BTC economy are also important indicators for the overall health of the industry, and these have reached all time highs as of late.

Hash Power

Hash power is a measure of mining activity. The greater the hash rate, the more mining power is coming into the system. Recent rises in mining hash power show that more miners are are joining and existing miners are contributing more power, despite opposition from browsers like Mozilla Firefox.

 

This could be down to increased interest levels and confidence in Bitcoin, as well as the wider availability of mining pools and improved mining hardware. Whatever the case, hash rate reached its all time high on September 8th, with 94 quintillion hashes per second. Network security has never been better.

Developers Steady

The price of Bitcoin reached an all time high in December 2017, trading at over $20,000. Despite recent improvements in price, the overall value of the currency has dropped by around half since then. Did the developers flee when this drop occurred? The short answer is no. The number of developers has remained steady since then (rising from 106 in 2014 to 314 today). That’s more experts solving working on maintaining security, boosting the performance and capacity and reducing transaction costs.

Economic Activity Promising

Finally, economic activity is also showing promising signs, not necessarily in terms of trading volume and overall market value, but in terms of transactions, which recently reached their highest volumes since mid-July.

Outputs per day, considered a more accurate measure of economic strength, also hit over 1 million in April, and regularly hit over 700,000. Outputs are considered a more accurate measure of economic strength, as users can make multiple transactions in a single output.

Uncertainty Still Abounds

It’s always difficult to know what to expect from Bitcoin in the future. It all depends on your position when it comes to Bitcoin, but the uncertainty of the market certainly demands caution. Volatility is still a huge factor that continues to prevent wider commercial adoption. Despite this, the signs are there to show that the fundamentals of Bitcoin are working, and that they are gathering momentum. Investment is always a risk and often the price doesn’t reflect the reality. Strong fundamentals are one way we can grasp what’s going on behind the scenes.

(Disclaimer: This article does not qualify as investment advice or suggest anything to do with investment. Anyone thinking of investing in cryptocurrency should be aware of the risks and be prepared to lose their entire investment.)