The changes that can be felt in all our lives by the coronavirus are slowly becoming a habit for many people. The financial markets also seem to have calmed down (for the time being). With Bitcoin, on the other hand, there is no reason to get used to anything new, because the network continues to work just as it did before the crisis.
Apart from price crashes, which are of course unavoidable in the current situation, a block is still added to the blockchain every 10 minutes and transactions are carried out uncensored. This resistance to the current situation is still correct, but now it seems that some Bitcoin parameters, such as the number of transactions, are also affected by the crisis
If you want to find out what this means for BTC, download the best online aggregator, our companion app Born2Invest. The app is a fast and easy way to check the latest business headlines. It gives users access to recent publications and stories, media and objective analysis, thematic sections and feeds.
Bitcoin transactions are at a low point
Many Crypto and Bitcoin fans pay attention mostly only to the BTC course, which is understandable. In the long run, however, it is much more important to observe the fundamental parameters, because these are the ones that make a positive price development possible in the first place.
Conversely, the example of the 2017 bull run shows that price increases can only be sustained if they are supported by fundamental parameters. One of these parameters is the number of transactions sent through the Bitcoin network.
Unfortunately, this fundamental value in Bitcoin now also seems to have been infected by the coronavirus, as the value has fallen by 100,000 transactions per day. Whereas, before the coronavirus crisis, an average of almost 350,000 transactions were sent out daily. This figure has now fallen to 250,000 transactions, which is a reduction of almost 29%.
Crypto expert Mati Greenspan wrote on Twitter that these are the lowest values since December 2018, when Bitcoin and Co. were still in the deep crypto winter.
Is the slump in daily transactions good or bad news for Bitcoin?
At first glance, this news seems to be bad for Bitcoin. In principle, this is also true, but the slump in daily transactions is a value that does not change the way the network works and, therefore, does not pose a direct threat to BTC.
Even payment giants from the traditional financial sector like Visa have announced that they are already noticing declining transaction numbers. The main reason, both for Visa and for Bitcoin, is probably that people are consuming less at the moment, which simply means fewer transactions.
As unpleasant as the development of daily transactions is at first glance, it is clear that this figure will recover over time. On the other hand, it also clearly shows that Bitcoin is probably (partly) used for paying for products and services. That is because trading on the stock exchanges is still going on. Only consumer consumption has collapsed as a result of the corona crisis.
This fact, in turn, is very gratifying because it underscores that Bitcoin has value solely through its use as a payment network. Although this argumentation may not completely convince critics, it does show in which direction BTC can go in the future. And this direction is still clearly bullish.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Transitory Inflation Debate
the US economy is about to go over a massive fiscal cliff; and the monetary cliff is just as deep....
Due to Demand Concerns, the Rice Prices were Lower Last Week
Rice prices were lower for the week in good volume trading on demand concerns. It looked like speculators were the...
Genomcore Finalizes its Entry into the United Kingdom after Increasing its Turnover by 73% in 2021
Genomcore has recently entered the market in the United Kingdom. In 2020, the company had a turnover of $912,000 (€750,000),...
The Fintech Ecosystem in Colombia Exceeds 322 Companies
The digital credit segment is the leader in Fintech service offerings, followed by payments and corporate finance, according to Fintank...
Valsabbina Bank and Siav Purchase 25% of MyCreditService
Valsabbina Bank and Siav will purchase 25% of MyCreditService, as part of an investment agreement. The entry of the two...
Cannabis7 days ago
On the Way to Cannabis Legalization: Frankfurt Positions Itself as a Pioneer
Featured6 days ago
Crowdfunding for the Creation of a Legal Defense Fund for Wind Power Projects Completed
Crypto7 days ago
Bitcoin Recognized as Official Currency in El Salvador
Crypto5 days ago
Stablecoins: The New Kid On The Crypto Block