70% OF BITCOINS HAVE BEEN HOARDED FOR SIX MONTHS OR MORE

Recently, a metric was run on the Blockchainthat analyzed the distribution of Bitcoin wealth throughout history. Any Blockchain study can draw a wide range of conclusions, but a paper by Tim Swanson, author of the blog ‘The Great Wall of Numbers,’ draws an interesting conclusion.
As much as 70% of Bitcoins have made no movement in the past six months because of the price drop since June. According to the data, which cannot lie, movement of Bitcoins experiences a particularly strong growth during bull markets – when the price of Bitcoin in fiat currency is higher. Put more simply, most transactions happen when Bitcoin is valued more by those accepting it.
This is a sobering chart for advocates or entrepreneurs within the merchant payment processing vertical. What this shows is that despite the near quadrupling of merchants that now accept bitcoin as payments (this past year increased from ~20k in January to ~76k through September), on-chain activity has not seen a corresponding increase by consumers. They are all effectively fighting for the same thin slice of liquid coins, a segment which empirically has not grown. -Tim Swanson

This post was published at Crypto Coins News on November 27, 2014.

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