During the beginning of this year, when Bitcoin prices declined from their recent peak in December of about 60%, the decline in the number of daily bitcoin transaction went unnoticed.
Several explanations have been brought forward to explain the drop in trading from software to news-related. What remains complicated is why the number of transactions has not bounced back despite the increase in bitcoin prices of about 50% since February 5th. This has left some bitcoin investors in dilemma, pondering on whether people are losing interest in the currency.
The daily figure recorded for transactions have dropped significantly by half its number from its December peak and reached its lows in two years in February, regardless of the growing popularity of bitcoin which has gone back to the $10,000 level.
This low record of the transaction comes as bad news for Bitcoin bull stated Charles Morris, chief investment officer of Newscape Capital Group in London who is also cryptocurrency investor. He added that you determine the track on which prices are headed based on the transactions on the Bitcoin network which can be determined by metrics like transaction volume.
According to Morris, there was an intense volume but this is changing. Morris who is presently working on a project that will enable tracking prices on different cryptocurrencies noted that they might be proceeding into an empty market for bitcoin.
This week, we have seen transaction volumes dropping to 200,000 from a peak of 400,000 in December based on statistics from research firm Blockchain.info. The currency traded at $500 when it was at its previous low.
Transactions that are waiting for approval by the Bitcoin network also declined to form a seven-day average of 130 million bytes at the beginning of January to about 35 million presently.
The transaction confirmation times have also declined even though the explanation given for this is the technology that highlights bitcoin has been programmed to handle such occurrences.
However, not everyone is on the same page that a drop in transaction signals trouble for the currency. It might be a sign of a positive comeback to prove the market is becoming secure and stable.
David Drake whose New York family office has over $10 million worth of cryptocurrency and blockchain investments noted if prices return to normalcy, the popularity of the coin will regain its glory. He also predicted that bitcoin prices will hit $35,000 by the end of the year.
Drake added that it has become a trend for transactions to slack down and regain momentum and this will be in the minds of people for a while.