Value of holding bitcoin surpassing trading value

Data: Coin Metrics; Chart: Axios Visuals

Now more than ever, bitcoin as “digital gold” is the prevailing narrative fueling big-name adoption, writes Coindesk. Bitcoin is something to be bought and stored, not something to be spent or used. 

Why it matters: Bitcoin as a store of value is trouncing bitcoin as a medium of exchange. While the price of bitcoin is near its all-time highs, usage of bitcoin for anything other than investing has slowed.

By the numbers: Roughly 60% of all bitcoins have not moved in at least a year. The average time bitcoin is being held in individual wallets recently surpassed 1,000 days for the first time.

Between the lines: That said, bitcoin does function as a currency in two key places: darknet e-commerce and countries with economic instability. 

  • Darknet volumes are still seeing a steady upward trend. Such marketplaces drew roughly $1.5 billion in revenue in 2020, up from just under $500 million in 2015. Overall, about 1% of crypto transactions last year were for illicit purposes.
  • Kenya, Venezuela, Nigeria and Colombia lead the pack in peer-to-peer exchange volume, which is the sector’s best proxy for grassroots activity. Even among the leaders, however, volumes remain tiny. Nigeria, the leader, saw $353 million in P2P volume in 2020 — a number that’s been fairly flat for the past three years.

The bottom line: For now, bitcoin is more cryptoasset than cryptocurrency. Take it from Coinbase, the San Francisco crypto exchange prepping to go public: 

  • “The fact that wallet-count is outpacing the volume of on-chain transactions illustrates the market’s belief that Bitcoin’s primary application is as a store of wealth,” Coinbase wrote in an annual report published last week. “In short, people are holding their Bitcoin rather than sending or spending them.”

Interested in more Axios crypto content? Please click here to be on our list if we launch something in the space.

Source link

The post Value of holding bitcoin surpassing trading value appeared first on TechFans.