The fundamentals of the Bitcoin and Ethereum networks still look strong despite the recent drop in prices.
The hash rate of both recently hit a new all-time high.
The number of active addresses and those holding more than 1,000 BTC is also on the rise.
Bitcoin and Ethereum still look strong at their fundamentals despite the recent drop in prices. Both networks have just achieved record hash rates and it seems that their use is increasing.
The hash rate is peaking as BTC and ETH prices decline, losing some of their gains so far in 2021. Clearly, price volatility has not deterred miners from trading. support either of these two networks.
Crypto prices are falling but fundamentals remain strong
The first two weeks of 2021 were a roller coaster ride for cryptocurrency investors. Bitcoin and Ethereum both started the year by continuing their rallies that started in late 2020.
Bitcoin crossed the $ 30,000 mark on January 2 and continued to climb until it hit a new all-time high on January 8, just below $ 42,000. Meanwhile, ETH hit a high of around $ 1,350 after opening the new year at less than $ 750.
However, the upward momentum came to an abrupt end on Sunday January 10. As of Monday January 11, BTC had fallen to around $ 31,700 and ETH was trading below $ 1,000 again.
Despite a 25% drop in prices, network fundamentals remain solid. As the Coin Metrics ‚ State of the Network ‚ weekly report indicates , some metrics to assess the strength of the cryptocurrency have continued to increase.
ETH Options BTC Surge
In particular, the hash rates of Bitcoin and Ethereum have reached an all-time high. Hash rate refers to the combined power of all of the mining hardware securing a blockchain network.
A growing hash rate indicates that miners continue to deploy hardware to the network in the hope of future profits. This suggests that both Bitcoin and Ethereum miners remain confident, even in the face of a significant drop in price.
Bitcoin’s hash rate hike looks likely to continue, with major operations slated for expansion this year. As BeInCrypto previously reported, several US mining companies recently placed massive orders with mining platform maker Bitmain.
The equipment that Marathon Patent Group and Core Scientific have ordered will not arrive at its destination until the end of the year. This delivery will significantly expand the existing activities of each company.
Bitcoin and Ethereum’s active addresses are also on the rise
In addition to hash rates at their highest level to date, the Coin Metrics report also highlights the growth of active BTC network addresses like ETH. The number of addresses transacting on both networks is approaching the highs set during the 2017 bull market.
Coin Metrics points out, however, that active addresses do not give a clear picture of the growth in network usage. This is because many cryptocurrency users prefer to use multiple addresses. An address therefore does not necessarily correspond to a single user.
The research company wrote, however:
“With this in mind, active addresses are nevertheless a good indirect indication of overall usage. The increase in active BTC and ETH addresses indicates that on-chain activity is increasing for both networks ”.
Additionally, Coin Metrics points to an increase in the number of addresses holding 1,000 BTC or more. Used as an indicator of institutional adoption of Bitcoin, these “whale” addresses have seen a sharp increase since the start of 2021.
Inspired by Michael Saylor’s BTC purchases for his company MicroStrategy, the end of 2020 was marked by the position of several financial institutions and companies in the bitcoin market. Many industry observers expect this trend to continue in 2021.
In this regard, MicroStrategy will be hosting an online event called “ Bitcoin and Corporations ” next month . The business analyst firm will explain how they made the decision to buy BTC, as well as the methods they used to go about it.