RJ Fulton, one of the analysts of The Motley Fool, a US-based consultancy company, drew attention with his comment on crypto money. Fulton pointed out that there is an “excellent opportunity” to buy the biggest cryptocurrency, Bitcoin. Here are the details…
Analyst points to mining difficulty for biggest cryptocurrency
Bitcoin (BTC), as we reported on cryptokoin.com, is up more than 60 percent in 2023 after a brutal 2022 when its price fell more than 64 percent. Some call the recent bounce a bull trap in a protracted bear market, but there are reasons to believe Bitcoin’s “best” days are coming, according to analyst RJ Fulton. Although its price is still 61 percent lower than its all-time high of about $69,000 in 2021, some metrics suggest that Bitcoin is still doing relatively well.
First, the analyst draws attention to the mining difficulty metric. The most important potentially overlooked statistic, according to the analyst, is mining difficulty. This metric is currently at an all-time high. According to the analyst, this is one of the most valuable indicators of coin health. Because the greater the mining difficulty, the more decentralized and secure the Bitcoin network becomes.
Since the cryptocurrency was created 14 years ago, mining difficulty has steadily increased, thanks to the increase in the number of nodes worldwide running Bitcoin code and more powerful mining computers coming online. As this trend continues, it shows that the Bitcoin network continues to grow in terms of security and decentralization even in the middle of the crypto winter. “Personally, I see this as one of the most compelling reasons to invest in Bitcoin today,” the analyst said.
Analyst drew attention to the record in block size
Besides reaching a new high in mining difficulty, another metric has recently set a record: block size. Evaluating the block size is important, according to the analyst, because it allows us to see how many transactions are taking place on the network and thus measure the activity. This increase in activity is likely due to the emergence of Bitcoin-based NFTs. These products have been on the waiting list of more than 150,000 people since their introduction in January.
As a result, the average block size of crypto increased by 20.5 percent, reaching an all-time high of 2.5 megabytes. An increase in block size indicates a greater demand for block space; as a result, this increases the fees paid to miners. More fees generated lead to a higher level of compensation for miners and therefore more incentive to secure the network.
Bitcoin addresses are growing
Finally, the number of non-zero Bitcoin addresses has also reached an all-time high. Similar to mining difficulty, growth in non-zero addresses has been relatively consistent year-over-year, regardless of market sentiment. As of this writing, there are over 44.6 million addresses containing some Bitcoin. Just five years ago, that number was 23 million. There is a prevailing belief that more than zero BTC addresses can act as a proxy for measuring network growth and usage. The analyst remains optimistic for BTC as that number continues to rise and at a rate not seen since Bitcoin hit its all-time high in November 2021.
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