On-chain data, thanks to the blockchain
Because the Bitcoin blockchain is open in nature, all transactions on it can be viewed publicly. Consequently, the history of all bitcoins can be tracked and all sorts of metrics can be devised based on the activity of these coins. There is a lot of important information that the blockchain can track. Several crypto intelligence firms have sprung up around to figure out how to interpret and use this data, including Glassnode and CryptoQuant.
One useful on-chain metric is the number of active addresses, which Glassnode defines as “the number of unique addresses that were active in the network either as a sender or receiver.” This is a useful metric in gauging network activity, as it is a proxy for how much use the Bitcoin network is seeing. It tends to tick higher during bull markets and fall in bear markets. Although this metric has declined on a 30D basis from the spring, it has been rebounding since late July, suggesting Bitcoin is beginning to see more use.
CrossTower Inc. provides this content for general information purposes, to better inform you on your digital asset investment journey. We do not provide investment recommendations or provide tax advice. Please consult your investment professional or tax advisor if you require assistance in these areas.
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