Bitcoin Circulation Drops to 13-Year Low
On-chain data suggests Bitcoin is no longer being used as electronic cash by its userbase as the token’s circulation has seen a steep drop.
CryptoQuant founder and CEO Ki Young Ju said on X that they had recently noted a slowdown in Bitcoin circulation. The main indicator under consideration is “Velocity”, and it shows us how fast the cryptocurrency moves around the market.
#Bitcoin is circulating as slowly as 13 years ago.
Despite Satoshi’s vision of “P2P Electronic Cash,” Bitcoin is primarily used as “Digital Gold,” with institutions holding it without frequent transactions.
Its velocity will peak someday when $BTC is widely used for payments. pic.twitter.com/3aLyN2dDX6
— Ki Young Ju (@ki_young_ju) June 11, 2024
High-sped transactions would be the rule when the Velocity is super-fast. On the opposite, when the Velocity is very low indications are that the tokens are to be retained in addresses for a longer time.
The 2021 bull market saw Bitcoin Velocity increase manifold and the mid-2022 bear market event had the highest magnitude of Velocity.
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Bitcoin was then in weak momentum, after that, it was relatively quiet until the end of 2023. The Bitcoin’s present Velocity is at the lowest point in the fourteen years.
It’s been evident from the data that the circulation of Bitcoin had shrunk and thereby the crypto is not utilized much for transactions. It seems that Bitcoin is no more a simple form of peer-to-peer electronic cash, and is viewed now as” digital gold”.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
