Daily Crypto Report: China’s Renewed Interest in Buying Bitcoin; Bitcoin Network Activity is Outpacing Its Price.
China’s Resurgent Stock Market is Seeing Profits Flow Into Bitcoin
[bitcoinist.com] Statistics gathered by monitoring resource Coinlib showing capital inflow into bitcoin and other cryptocurrencies puts the Chinese yuan (CNY) in the top entry currencies.
For the 24 hours to press time, CNY inflows into bitcoin topped the equivalent of $165 million, with Ether, the largest altcoin, seeing just under $75 million during the same period.
That performance puts China second out of the fiat entry assets, predictably behind the US dollar, while by far the largest inflows come from cryptocurrency stablecoin Tether.
The figures come at a time when China’s Bitcoin-focused economy — specifically mining giants — appear to be emerging from six months’ retraction.
Bitcoin Won’t Scale Because It Doesn’t Need To, Says Block.One CEO
Bitcoin, some argue, can only reach significant value if it can scale to meet transaction demands of a global audience. However, co-founder and CEO of Block.one, Brendan Blumer, believes that Bitcoin may never need to scale moving forward because it’s already well on its way to becoming ‘digital gold.’
“Over the next two decades, Bitcoin will replace gold as the leading commodity to store value,”
“Most of the activity will flow to scalable layer-two solutions, but Bitcoin’s awareness and liquidity will continue to compound,” he explains.
One such example today is the Lightning Network (LN) that has grown exponentially over the past year. With usability noticeably improving, this second-layer application is beginning to deliver on its promise of transacting bitcoin instantly at fractions of a penny.
Therefore, the Bitcoin blockchain may not need any further on-chain scaling at all, though “big fees for settlement-layer transactions” are to be expected, according to Blumer.
Blumer’s prediction echoes last year’s report from Microsoft, which concluded that layer-two scaling solutions, such as LN are superior to scaling on-chain by increasing the block size limit.
Bitcoin’s Price and Network Activity: One is Outpacing the Other
[coindesk] Bitcoin’s user growth, as represented by active addresses, has spiked in the last eight weeks leaving the price far behind, a move that contradicts the popular belief the two tend to move in tandem.
The 30 day average of active addresses on bitcoin’s blockchain, or the number of accounts that made cryptocurrency transactions at any point during the last 24 hours, total 664,064 as of March 16– up 17 percent from 569,812 seen on Jan. 20. Bitcoin’s 30 day average price, however, has increased just 1 percent during the same time span, according to Coinmetrics.
An uptick in active addresses is taken by many as a sign of the cryptocurrency’s increasing popularity or investor confidence. The active addresses count, however, tends to rise even when long-term dormant “HODLers” move out of the cryptocurrency and into fiat.
So, betting on a price rise every time active addresses spike could prove costly.
Other network activity metrics like the network volume and the transaction amount to active addresses ratio (TAAR) tend to shed more light on how network activity impacts bitcoin’s price.
Disclaimer: The Daily Crypto Report is curated by DigiFinex for your reference only, it is NOT an investment advice.
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