The seven main exchanges account for 13% of the total issuance of Bitcoin. The new indicators allow measuring the growth and adoption of the first cryptocurrency.
It was recently announced that Glassnode, a research firm specializing in Bitcoin markets, launched a new set of statistical indicators. This report shows how the number of new Bitcoin addresses increases more quickly than the number of “entities” that enter the market.
These entities, both individuals and platforms, safeguard their funds or those belonging to someone else distributing them in different Bitcoin addresses. They could also be driving the massive generation of new addresses as they enter and increase their participation in the network.
Details of the relationship between both growth metrics (addresses and entities) appear in the Glassnode publication. The text shows the following indicators: number of new entities, growth of funds managed by the entities, number of whales (single entities with more than 1,000 BTC in their addresses), active entities (sending and receiving), active entities only as receivers, and active entities only as issuers of Bitcoin transactions.
The report seeks to answer the question of how many active users are in the Bitcoin network. This is based on the premise that the Bitcoin addresses may contain funds of more than one individual (such as the address of an exchange). Besides, a single entity can also control several Bitcoin addresses.
According to the Glassnode analysis, the number of entities that own Bitcoin in January 2020 was 23.1 million, 18.5% less than the existing number of addresses with a balance greater than zero (28.4 million). With this, they seek to make the distinction between entities and individual users.
In the same way, the analysts explain that the research method consists of grouping the addresses around the entities. Because of this, the number of these new entities becomes a smaller fraction of the number of new addresses in the network.
They add that the daily number of new addresses in the Bitcoin network in 2019 exceeded 355,000, while the number of new entities was just over 100,000, with a 28% variation between the two measurements.
According to Glassnode, a very particular moment in which both metrics were reversed was in early 2018. This suggests an increase in the activity of old (already existing) users on the network, rather than new users joining it.
The integration of new addresses with a balance of less than zero is substantially more unstable than the growth of entities. However, it does not mean that they have not had consistent growth over time.
Glassnode indicates that, throughout the history of Bitcoin, the daily growth of entities regarding the growth of new addresses has only been negative for 21 days. In its opinion, this indicates a steady growth in the adoption of Bitcoin in the last 10 years.
The study also determines that about 75 entities controlled 10,000 BTC or more last January, while 7 entities had 100,000 BTC or more. These 7 entities are large exchanges such as Coinbase, Huobi, Binance, Bitfinex, Bitstamp, Kraken and Bittrex. All of them together own 2,350 million BTC, 13% of the maximum Bitcoin issuance (21 million).
Users can consult the balances of the exchange houses online. In February, mass media reported that the deposits in exchanges were at their lowest point in 3 years. However, specialists expect the deposits to increase again after the next halving.
By Alexander Salazar