The relation between Bitcoin and Ethereum addresses, and price
What’s going on with Bitcoin?
This week, we’ll be looking into new BTC addresses, courtesy of GlassNode.
The first chart we need to look at is the number of new addresses per day with non-zero BTC balances.
There are two main conclusions we can draw just by looking at it:
- The number of new addresses rose from an intra-year high of about 20,000 in 2011 to more than 800,000 in December 2017. That’s a 4,000% increase.
- After peaking above 800,000 in late 2017, the number of new addresses fell over 50% to about 360,000 in March 2020.
- Overall, the above chart not only shows rising interest in bitcoin, but also that the difference between the high of late 2017 and the present figure isn’t too significant. After all, it seems the number of active addresses didn’t fall nearly as much as the price did, percentage-wise, which could indicate a greater number of ‘hodlers’ remaining in the space.
Conclusion
Essentially, the number of new addresses dropped more than 50%, while the price of Bitcoin fell over 65% during the same period.
This difference suggests that many long-term users of the cryptocurrency are unphased by its price swings.
‘Hodlers’ seem to think Bitcoin is here to stay.
What’s going on with Ethereum?
Ethereum is also one of our favourites. Actually, it’s the only serious contender to the King in terms of volume and liquidity.
Let’s take a look at the number of new ETH addresses with a non-zero balance, courtesy of GlassNode.
Although Ethereum has far fewer total addresses than Bitcoin, ETH is showing clear bullish signals in terms of both the number of addresses and the price.
We can draw two main conclusions just by looking at it:
- The number of new addresses increased from an intra-year high of about 2,000 in 2015 to a peak value of almost 350,000 in January 2018. That’s a roughly 17,500% increase.
- After reaching nearly 350,000 new addresses per day, this number fell over 80% to about 69,000 per day, where the number currently sits.
Even though the number of new ETH addresses has been growing since inception, it’s quite interesting how the behaviour of both the crypto’s price and its hodlers is different from that of Bitcoin.
For starters, ETH’s price gains far outpaced those of BTC during the bull run of 2017-2018. That means either a greater number of people were interested in the project, or more smart money bought the cryptocurrency.
Second, the spread between the ratio of price appreciation and new addresses is much greater in Ethereum than it is in Bitcoin. In fact, it’s roughly 30% higher.
Conclusion
Ethereum seems to be enjoying fewer first-term buyers than Bitcoin, as fewer addresses popped up during the same period.
One important variable to consider is that Ethereum uses addresses more frequently than Bitcoin, due to its core functionalities.
What you should understand is that smart contracts trigger more transactions and generally use more addresses to run and interact with each other.
But still, Bitcoin seems to be the one attracting more buyers.
How about that. 🧐
Did you enjoy our analysis?
This week we’ve dug deep into new addresses and what the growth rate means for the Bitcoin and Ethereum ecosystems.
Our analysis shows how even though prices declined substantially following the last bull market, the number of new addresses with non-zero balances continues to grow.
Although the growth rate diminished starting in 2018, activity picked up in 2020, with a greater number of addresses being created.
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The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Coin Rivet.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision. This article was written by Pedro Febrero, under the Quantum Economics brand. Primary co-editing was done by Mati Greenspan, founder and CEO at Quantum Economics, and Charles Bovaird, senior contributor for Forbes and vice president of content at Quantum Economics.
