Earlier this year, as the cryptocurrency with the largest market capitalization fell more than 60% from its previous record peak, another less noticeable factor also fell: Bitcoin’s daily transaction count.
Bitcoin is being `abandoned` when the average daily transaction volume has dropped to only half compared to the peak at the end of 2017.
There are many reasons given to explain this, from software factors to negative market information.
The average number of transactions per day has halved since Bitcoin peaked in December 2017 and hit a two-year low last month, even as the currency returned to levels near $11,000.
According to Charles Morris, head of investment at Newscape Capital Group (London), data on falling trading volume could be bad news for bulls.
`We had a bullish period and now it’s cooling off,` Charles Morris said.
According to Blockchain.info, the seven-day average number of transactions per day has dropped from 400,000 transactions in mid-December to about 200,000 transactions this week.
The seven-day average number of transactions per day fell to a two-year low.
The average number of pending transactions in the 7 days of the Bitcoin system also decreased from 130 million bytes at the beginning of January to about 35 million bytes at the present time.
Bitcoin’s transaction confirmation times have been significantly reduced, thanks in part to Bitcoin’s underlying technology being adapted to solve this problem.
Besides, not all investors agree that low trading volume is a negative signal for Bitcoin.
David Drake, who currently owns a family-owned company in New York, believes that investors may be convinced when Bitcoin prices rise again.
The recent decline in Bitcoin price may also be the cause of the decline in trading volume.
`Retailers, payment centers and online game companies are leaving Bitcoin,` commented Multicoin Capital investment fund director.
