Bitrabo Editorial
Recent data indicates a decline in the use of Bitcoin as electronic cash, with a significant drop in circulation.
Bitcoin Velocity Reaches Record Lows
The concept of “Velocity,” which measures the speed of Bitcoin tokens circulating in the market, has dropped to historical lows. When Velocity is high, coins move quickly, but a low value suggests tokens stay in addresses for extended periods before being exchanged.
A chart illustrates the fluctuation in Bitcoin’s Velocity over time, showing a peak during the 2021 bull run and a subsequent decline since the middle of the 2022 bear market. The trend has continued downward, reaching the lowest levels in about 13 years in the last few months of 2023.
Bitcoin, originally designed as peer-to-peer electronic cash, seems to be mainly perceived as “Digital Gold” by institutions rather than for day-to-day transactions. The current low circulation rates may reflect this shift in user behavior.
The future of Bitcoin’s Velocity remains uncertain, as historical data shows cycles of highs and lows. While the current trend may persist, there is a possibility of a resurgence if Bitcoin becomes widely adopted for payments.
BTC Price Update
Bitcoin’s price has declined to $66,400, marking an 8% decrease from its recent high of $72,000 on Friday.