Bitcoin (BTC) had a dramatic end to 2017 and start to the new year. The top cryptocurrency in the world by market cap surged to record high prices close to $20,000 per coin in December 2017. Then it stumbled somewhat, settling down under $10,000. It has hovered in the $8,000 to $11,000 range for several weeks.
A report by Coin Telegraph suggests that this sideways price action which has dominated much of 2018 so far may be contributing to an unusual effect for the cryptocurrency: Bitcoin has had the lowest number of confirmed transactions per day since March 2016.
Feb. 26 Marked a Two-Year Low
BTC transactions have fallen alongside downward trends in price since the coin reached its highest level in December 2017. Since that time, as the price of Bitcoin has settled down, investors seem to have lost some of the spark which drove last year’s Bitcoin boom.
The lowest levels of transactions occurred on February 26, 2018, with only 180,000 confirmed BTC transactions. March 4 was only slightly better, with just 195,500 transactions taking place worldwide that day.
Bitcoin Unable to Regain Losses
So far, 2018 has not brought about a recovery strong enough to propel Bitcoin to the sky-high prices it achieved late in 2017. This is in spite of new releases to support Segregated Witness (SegWit) technology in February, all of which promise to make transactions in the leading cryptocurrency both faster and cheaper.
Nonetheless, investors appear to be more interested in the overall trading potential of the coin than in its efficiency. At this point, SegWit accounts for roughly one out of every three Bitcoin transactions. (See also: Bitcoin Price More Likely $100 Than $100K in a Decade: Harvard Economist.)
Critics of the cryptocurrency space suggest that last year’s ascendant prices may have been driven by speculation. Indeed, it seems that many investors have adopted a “buy and hold” approach to cryptocurrencies like Bitcoin, in which they sit back and watch the market rather than actively transact. So long as the speculation continued to drive up prices in the digital currency realm, this strategy may have seemed a viable one. However, if there isn’t sufficient trading activity, it’s unlikely that prices will remain where they are forever.
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