Bitcoin is once cryptocurrency that has continued to weather the storm since its creation, and against the backdrop of skepticism and criticism, the digital coin has been able to surpass expectations, and 10 years later, it sits atop the list of cryptocurrencies with some valuable properties. The profitability of Bitcoin over the years has made a lot of businesses, companies, and even individuals begin to invest in the cryptocurrency. The continued interest in the coin has been a contributory factor affecting its transaction growth, and another factor to consider is the uncertainty about the future of the coin, which could be the reason why the price run keeps fluctuating on the crypto market.
In a recent development, there was an experimental gauge employed to analyze the quality and quantity of bitcoin transactions on the network, especially with the 28-Week peak it got to on the 1st of June, 2019. The high was indicative of the fact that the most recent price rally of the cryptocurrency may be due to a fundamental transaction and growth process that has surpassed the expectations of many.
Transaction Amount to Active Address Ratio
Chris Brookins, Puglist Ventures Founder and CoinDesk Contributor proposed a system referred to as Transaction Amount to Active Addresses Ratio (TAAR), which is gotten by dividing the adjusted transaction volume (24 hour) of bitcoin, by the total number of addresses that are active, in order to identify the average amount spent by each of the active addresses on a daily basis.
Apparently, if the TAAR is observed to be high, then it invariably means each of the active addresses (users) is carrying out Bitcoin transactions in notional values that are high, and that basically means that Bitcoin’s quantity (the transaction volume) is high as a result of the number of active addresses/users spending the coins). Hence, when the quality and quantity of the bitcoin network is experiencing some high, then it is expected to generate a positive reaction from the crypto market, and that invariably means there will be a negative reaction when it is discovered that the quality and quantity of the network is low.
There was some Bitcoin analysis carried out in 2013 by Coinmetrics, where they proved that Bitcoin’s price gets some enhanced sustainability when there is also some TAAR trend taking place in a similar direction as the sustainable trend of Bitcoin’s price.
In 2015, there was a similar trend where the pace increased in Bitcoin’s network activity, and that signified that there was a fundamental confirmation about the price growth of Bitcoin, which invariably debunked the news making the rounds about Bitcoin’s price growth being totally dependent on just speculations.
In a very recent development, the TAAR of Bitcoin has begun to experience some increase with its price, just the same way it happened just at the end of the recent bear market. Hence, this analysis goes to show that the sustainability of the latest price growth of Bitcoin could continue, based on the rise of the Bitcoin activity happening in the network. We also argue the fact that Bitcoin is still undervalued in our most recent market report which can be found here.