The situation for Bitcoin and Ethereum remains fundamentally strong despite the recent price drop. On both networks, hash rates and user numbers are growing.
Amid the recent drop in BTC and ETH rates, hash rates across both blockchains have hit record highs. As it turned out, the surge in volatility did not scare off miners.
Prices are falling, but the foundation is worth
The beginning of the new year turned out to be very volatile for the crypto market. Bitcoin and Ethereum first continued to develop the 2020 rally.Already on January 2, the BTC rate broke above $30,000, and on January 8, it moved the historical maximum of $42,000. The price of ETH met the new year with a mark of $750, but also increased to the $1350 region.
However, it was all over last weekend. By Monday, BTC had already dipped to $31,700, while ETH was again trading under $1000.
However, despite a roughly 25% drop in prices, the network's fundamentals remain strong. These statistics were shared by Coin Metrics experts in the weekly report on the state of blockchain networks "State of the Network". As it turned out, the hash rates in the Bitcoin and Ethereum blockchains have updated all-time highs.
Traditionally, this indicator is regarded as an indicator of the health of the network and activity in it. Its growth indicates that miners continue to actively operate equipment for mining coins, believing in future profits. Such optimism is especially important against the background of a large-scale pullback in quotes.
The number of active addresses is also growing
In addition to the hash rate, Coin Metrics experts also noted an increase in the number of active addresses on the BTC and ETH networks. The number of addresses in them making any transactions approached the peak highs noted during the 2017 bull market.
However, Coin Metrics admitted that this indicator is not able to reflect the true state of affairs with the activity on the network. This is largely due to the fact that many users create many addresses for themselves. Therefore, the rule "one wallet = one user" does not work in this case.
However, analysts stressed:
“Still, active addresses are a good indicator of overall network usage. Accordingly, their growth on the BTC and ETH blockchains indicates the growth of activity in both networks. "
Experts also reported an increase in the number of wallets with 1000 BTC or more on their balance sheets. Such addresses of whales may indicate the increasingly active involvement of large institutional investors in the market. It is noteworthy that since the beginning of 2021, the number of such wallets has grown significantly.
One of the clearest examples of this trend is Microstrategy and personally its CEO Michael Sailor, who has gone from being a bitcoin skeptic to an ardent enthusiast. Moreover, MicroStrategy announced the Bitcoin for Corporations event, which offers to train other executives to invest in Bitcoin too.