Many users created Bitcoin addresses when the price of Bitcoin was between USD 4,000 and USD 8,000 per unit. Some analysts consider that Bitcoin is overvalued and advise being cautious.
This year, the number of Bitcoin (BTC) addresses in profit has reached a high of 30,958,430. The total value of these addresses, measured against strong fiat currencies like the US dollar, shows positive returns compared to when they received the bitcoins.
According to data from the Glassnode Company, the previous high was 30,956,994 addresses. This occurred a few hours before writing this article.
Given that there are a total of around 32 million Bitcoin addresses created, it is possible to infer that 93% of them have a positive return.
Paypal and New Bitcoin Holders Could Be Responsible
The recent growth in the price of Bitcoin is responsible, in part, for the increase in the number of addresses in profit. Among other things, this price rise was a result of the announcement that PayPal will begin to accept cryptocurrencies on its platform.
The growth rate of new Bitcoin addresses during 2020 is the largest since late 2017, which may have also influenced this situation. During their creation, these addresses received their first bitcoins when the price was between USD 4,000 to USD 8,000 per unit.
There seem to be signs that a new generation of Bitcoin holders is emerging. However, the possibility that former holders are migrating their currencies to other addresses is also open. Of course, it is important to note that new addresses do not necessarily imply that there are new users since the same user could have two or more addresses.
Some, Bitcoin May Be Overvalued
Even though these data may generate excitement, some analysts advise being cautious. For example, the Weiss Crypto Rating platform said that there is a high correlation between Bitcoin and the stock markets. They argue that “this is bad, because currently – due to US election rapidly approaching – the stock market has a lot of headline risk, and correlation transfers all that needless volatility to Bitcoin.”
Weiss Crypto Rating made this statement before the community heard the news about PayPal. After that, it has not made new predictions about the price of Bitcoin.
Bloomberg also spoke in this regard and advised being careful. They consider that Bitcoin is “a bit overheated after piercing the USD 13,000 mark.” They show that the RSI index is at 80, which “is a level that analysts consider overbought.”
On his part, renowned trader Willy Woo, market analyst and co-founder of HyperSheet, maintains his bullish expectation in the long medium and long term. Besides, he argues that Bitcoin and cryptocurrencies, in general, have a long way to go and are only in their early stages.
According to Woo, it “takes 20 years for a new medium to express itself; TV was first radio shows with pictures, sitcoms came 20 years later. Putting traditional finance onto blockchains is presently just radio with pictures.”
By Willmen Blanco
