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Small Bitcoin Addresses Hit All-Time High And Fees Hit Multi-Year Low

The bitcoin network hit a new all-time high yesterday when looking at the number of bitcoin addresses on-chain that hold at least 0.01 bitcoin balance. This new all-time high came in at 9,245,770 bitcoin addresses that meet the criteria.

So why exactly is this a big deal?

Bitcoin price has been falling from approximately $69,000 to under $58,000 over the last week or so. This drop in price would normally signal a drop in transaction volume, active addresses, and various other metrics. But we have seen persistent demand from users of the bitcoin network to accumulate bitcoin in small or large quantities, regardless of price.

Many people assign these persistent, periodic buys to one of two factors — (a) new users coming on-chain or (b) continued dollar-cost averaging by small investors. Remember, we aren’t talking about very large dollar amounts here. The US dollar equivalent of 0.01 bitcoin currently sits at approximately $570. It doesn’t take many $20 or $50 daily, weekly, or monthly purchases to dollar-cost average into a 0.01 bitcoin balance.


Another important aspect of this new all-time high metric is that we are purely talking about on-chain bitcoin addresses, which does not include exchange accounts where the majority of bitcoin and cryptocurrency investors will go to buy, sell, or hold their assets. When you account for this detail, the 9 million number that may have previously seemed small compared to the global population, now seems a little bit more impressive.

But is there more to the story than simply the all-time high in bitcoin addresses with more than 0.01 bitcoin balance? Absolutely.

Take a look at the total transaction fees per day that people are paying to miners. This is the lowest it has been since around March or April of 2018.

The total can be misleading though, so let’s take a look at the mean of all transaction fees being paid to miners. That is also at a multi-year low.

This is worth pointing out because we don’t see any abnormalities in total transaction counts per day on the bitcoin network, nor in the mean transaction size.

So to recap, we have the number of on-chain bitcoin addresses with around $500 or more equivalent bitcoin balance at an all-time high. The total and mean transaction fees are at multi-year lows. And there are no abnormalities in the total number or mean of transaction size. This culminates in what would be a fairly bullish picture for the bitcoin network.

We are watching it become more and more decentralized over time, while also seeing fees drop lower and lower. There is still a ton of work to be done in order to scale the digital currency to global adoption, but the current work around layer two solutions and side-chains is quite compelling. I remain convinced that people will want a digital store of value that is built on a decentralized foundation. I also believe that people will be sensitive to paying high fees as more non-crypto native users start to adopt the technology.

It feels like bitcoin is moving in the right direction and adoption is only accelerating. The beauty of on-chain metrics is that we can watch it all play out in real-time and on a transparent ledger that can be analyzed by anyone in the world. You just need to have the intellectual curiosity to look.


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