Transaction volume Bitcoin down sharply

It is not only the price of Bitcoin that has fallen since the beginning of this year, the transaction volume has also been strong since the beginning of this year decreased. And although the price of the virtual currency has made a comeback of almost 50% since the beginning of February, the number of transactions has hardly increased since then. Of course, this results in lower transaction costs, but it also raises questions about the popularity of the virtual currency.

Compared to the peak of December last year, the number of transactions per day within the Bitcoin network has halved, but there is also a decrease of more than thirty percent compared to the first half of this year. While an average of almost 400,000 transactions were processed in seven days in mid-December, last week there were only 200,000, according to statistics from Blockchain.info. The last time the trading volume was this low, the virtual currency changed hands for less than $500.

Transactions in Bitcoin have fallen sharply in recent weeks (Source: Bloomberg)

Why are there fewer transactions?

According to some analysts, the low trading volume is a sign that the virtual currency is on its way out, while others believe that this is just a consolidation phase. Many investors who have had negative experiences with the long waiting times and high transaction fees would wait for a new time to get in.

Hopes are pinned on the new Lightning network, which bundles transactions and writes them into the blockchain in one go. In this way, the problem of scalability should become a thing of the past. Due to the high transaction costs and the extreme exchange rate fluctuations, several companies decided to no longer accept the virtual currency as a means of payment.

Another possible explanation for the drop in trading volume in recent weeks is that investors' attention has shifted from Bitcoin to other virtual currencies. According to figures from Coinmarketcap A year ago, Bitcoin represented 85% of the total market value of all cryptocurrencies, while today it is only 40%. The following chart shows that over the past year, investors' attention has increasingly shifted to alternatives to the Bitcoin.

Investors' attention shifts to other virtual currencies (Source: Coinmarketcap)

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