The usage of bitcoin has been evolving, and both its active utilization and its role as a long-term store of value are pertinent factors. On the one hand, Bitcoin’s integration into mainstream payment systems has been on the rise, albeit at a modest pace. More merchants, especially those operating online, now accept bitcoin due to its global nature and low transaction costs when compared to traditional payment systems.
Moreover, developments like the Lightning Network are making bitcoin transactions faster and cheaper, improving its scalability for everyday transactions. This technological progress supports an increase in its utilization as a medium of exchange. We have also seen a rise in Bitcoin usage for remittances and in regions with unstable fiat currencies.
On the other hand, a substantial portion of Bitcoin supply is considered as being held, or “hodled,” as users view it as a long-term investment or a hedge against inflation, akin to “digital gold.” Data analytics show that a significant percentage of Bitcoin addresses have not moved their holdings in over a year, indicating a prevailing trend of holding rather than spending.
In summary, while Bitcoin’s transactional use is on an upward trend, the philosophy of holding Bitcoin for its potential future value remains strong. This dual nature contributes to its stability and volatility in different measures, depending on broader market and geopolitical conditions.
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