There is Little Chance Bitcoins can Sustain any Real Recovery Until This Fundamental Metric Begins to Turn Upwards Again

Right now for the first time in over 8 years, Bitcoins is going through some of the longest and lowest stretches where its adoption rate is very low and not growing. And there is almost no chance it would fully recover until that reverses. I mean what will that recovery be based on if fundamentally actual users are no longer adopting it at the growing rate they were for years. Any temporary rises would be like vapor - based on nothing. And that is what bubbles are made of, which are guaranteed to eventually burst. Fundamentals will never go away - they can only take temporary vacations.

The metric is based on daily unique address rate. This metric is published here. A comparison to its price looks as shown below:


(Source: blockchain.info)

That trend was converted into a model, based on its Network effect using Metcalfe's law, which was explained in a prior article here. So we will continue to keep an eye out to see if Bitcoins will get back to its growing ways in terms of actual number of new users that are adopting the asset.

Maybe the Lightning network will change that dynamics but something will have to give here or its growth rate in price too will have to eventually change, long term. If Bitcoins are being used less, and the growth in blockchains and cryptocurrencies is continuing, this might be the sign of the beginning of a whole new realignment where cryptocurrency adoption is now proceeding through other alternative assets. This is important to blockchains and even steemit because previously the value of all other cryptocurrency asset has followed that of Bitcoins. We might slowly see that begin to change. Drop me a comment to let me know what you think or what you are seeing.

References:
https://www.sciencedirect.com/science/article/pii/S1567422317300480

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