The current transaction level of BTC is roughly 210,000 transaction per day while it was at nearly 400,000 in December before Bitcoin’s ATH. The current transaction volume is the same as when BTC was still equivalent to USD $500.00. Does the number of places you can use Bitcoin at directly affect its price, or will application and speculative trading drive the currency?

Photo by Chris Liverani on Unsplash

Despite Bitcoin’s popularity in the USA being a night and day difference from 2017 to 2018, the use rate hasn’t seemed to change much. In fact, the number of merchants who accept Bitcoin this year is fewer than the amount that accepted Bitcoin last year.

One of the reasons that some enthusiasts are so excited for the virtual currency is because of how quick and easy it is to send. However, as the (current) opportunity to use BTC diminishes, will the excitement for virtual currencies fade away as well?

Probably not.

As provoked in a recent post by Hackernoon, the blockchain revolution is probably more so about new applications and trading… not direct use.

The direct use of the currency was much more important at an earlier phase of blockchain and bitcoin when people were still using it to buy illegal goods on the (digital) Silk Road. This phase distributed the token more throughout the world, helping it ascend to its current global platform.

In the above graph, the red circle indicates the time when Silk Road closed.

Lets circle back to our initial question: will the number of (current) opportunities to use Bitcoin directly effect the price?

Since this market place was the most popular choice for BTC to be used at the time of closing, this would mean that the ability to use Bitcoin would have fallen upon the closure of the website (if using the above, bolded logic). Despite the closure of Silk Road, the price of Bitcoin continued to rise throughout 2013, nearly doubling its price in 3 months after trailing sideways for the later part of that summer and early fall.

This is one example that illustrates that the number of available opportunites to use Bitcoin does not have a direct consequence on price at these levels.

What do YOU think?

Will the (current) decline of opportunities to use Bitcoin reflect the future price of the cryptocurrency?

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