In a recent report by Bloomberg, the number of bitcoin wallets that were active overall increased two weeks prior to the bitcoin price spike. According to the market intelligence firm Flipside Crypto, electronic storage accounts, also termed as digital wallets, became active before the price spike as small-fry investors stepped into the game. While usually 40 to 50 percent of Bitcoins is kept in wallets, this average dropped down to about 10 percent indicating more activity regarding the digital asset. The following figure illustrates the number of inactive bitcoins which dropped significantly two weeks before the price spike.
This graph indicates that more people are now attracted towards the idea of buying bitcoin. As stated by the co-founder and head of data science at Boston-based Flipside:
If you are a crypto optimist, that’s good news…There are more people warming up to the idea of buying Bitcoin.
Overall, this news comes off as welcoming for the bitcoin proponents who want this currency be the future.
Acceptance in the masses is not something that bitcoin has enjoyed much. The negative connotation that has been attached with bitcoin due to its usage in illegal activities such as money laundering, criminal payments and usage in dark web makes it unattractive for the general public and the investor community. The largely negative image of bitcoin is due to the reason that its initial use-cases were mainly negative. What started as negative usage is now slowly but surely turning into a positive future effect.
Bitcoin has crossed the $5,000 mark for the third time ever since it was made. The reason behind this jump in the price is speculated from the activity seen in the futures market of bitcoin lately. Gabor Gurbacs, the digital asset strategist at VanEck, recently floated this argument that it is the futures market that pushed the price of bitcoin up.
Futures contracts are contracts that specify buying or selling of a particular asset or a commodity at a specified time in the future on a mutually agreed upon price. Bitcoin has its futures listed on two of the biggest options and futures exchanges of the United States, CME Group Inc. and CBOE. The bitcoin futures of CME Group Inc. expired last Friday and as investors went in to buy the futures for the new front-month, the activity in the market indicating interest by the investor community pushed the price of the asset up. This futures market activity indicates that more people are getting involved with bitcoin. Besides the interest in the futures market, the number of digital wallets owned by people has also increased.
Bitcoin is largely poised against the banking system of the world. To break the centuries old monetary system and create a place for its own, mass adoption is something that it needs to gain as soon as possible. In order to achieve this feat, bitcoin needs to establish a more credible image of itself and needs to solve issues like volatility and manipulation that hinder its usage in making everyday payments. Steps are being taken in both the tech and regulatory fields in order to make this asset more safe and secure for the general public. This increased activity of bitcoin wallets indicates that people are now finally warming up to the idea that it presents in the form of a decentralized currency. The asset is on the right path to achieve the status of a credible globally accepted currency.