Market uncertainties have continued to mount due to Coronavirus outbreaks and stock market fears. During the last few weeks, Bitcoin price has also been a bit shaky – following traditional markets in most scenarios. As of late, Bitcoin price has showed promise. In addition, unique address growth has surged the last 30 days.
Bitcoin Unique Address Growth
Bitcoin unique addresses are essentially payment addresses that don’t have a $0 balance. By tracking unique addresses, one can usually assess the usage of the Bitcoin Network. If unique addresses are growing, this tends to correlate with growing user base and growing daily usage. Back in June of last year, some analyst were unsure on Bitcoin price action due to the drastic drop in unique addresses. There tends to be a high correlation between market sentiment and unique address growth. When Bitcoin is selling-off, unique addresses will usually fall since less people are transacting in the space.
Despite Bitcoin price not rallying during recent traditional market turmoil, it’s interesting to see the surge in unique address growth. The last 30 days, Bitcoin has seen tremendous growth. Since February 10th, unique addresses have surged +32% going from 455,000 to nearly 601,000.
Catalysts
As outlined in a previous market report, traditional stocks and global markets continue to experience all sorts of volatility. The volatility is best explained through the fact that investor sentiment is very weak right now. Coronavirus, oil pricing, and treasury yields continue to be the main drivers. In addition, the reduction in treasury yields has also put pressure on corporation balance sheets as they try to fulfill pension liabilities and other underlying fundamentals. With the recent rise in unique addresses, it could be signaling that more people are turning to Bitcoin opposed to fiat. The surge in addresses occurred during the same time that global conditions were worsening. With the increase in unique addresses, it will be interesting to see if Bitcoin price changes sentiment to the upside.
Why Bitcoin Price Hasn’t Surged Yet?
Despite Bitcoin being labeled as a “global hedge” last year by many “analysts”, Visionary Financial has always thought differently. Despite Bitcoin being historically uncorrelated to traditional markets, it’s a huge step for it to become the ultimate hedge during a potential “global pandemic.” Bitcoin has hedged very well in “normalized markets” , but the environment right now is completely different. With treasury yields tanking, it’s pure evidence that investors are flocking to safe haven assets. With the low adoption rate in Bitcoin investing, it’s hard to justify a “global hedge” right now. Investors are more worried about sitting on the sidelines, opposed to additional speculation. We have to remember that the baby boomer generation already went through this once. As many of these folks approach retirement, their appetite for risk is going to shrink dramatically.
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