Bitcoin's bulls continue to pin their hopes on the upcoming halving event – which is now just around 300 days away – to return to the merry days of rip-roaring gains. These expectations are now catalyzing a creeping improvement in the cryptocurrency's fundamentals. Meanwhile, two of the world's leading monetary institutions just conceded that crypto is here to stay.
First, the IMF recently published a report titled "Interest in Central Bank Digital Currencies Picks Up in Latin America and the Caribbean While Crypto Use Varies." Toward the end of the report, the IMF conceded:
"While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run. The region should instead focus on addressing the drivers of crypto demand, including citizens' unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics."
₿𝗥𝗘𝗔𝗞𝗜𝗡𝗚: Federal Reserve Chairman says "crypto appears to have staying power as an asset class" pic.twitter.com/APbt2KXtfD
— Documenting ₿itcoin 📄 (@DocumentingBTC) June 21, 2023
In a similar vein, Federal Reserve Chair Jerome Powel recently noted that "crypto appears to have staying power as an asset class."
Given the heft that these two monetary institutions carry in shaping the globe's financial policies, their recent conciliatory statements regarding Bitcoin and other cryptocurrencies carry quite a lot of significance.
Liveliness provides a big picture view into the propensity of Bitcoin holders to spend or hold their coins. Currently, Liveliness is in a multi-year macro downtrend, having peaked in May 2021 when bear market first set in.
We can see a similar structure has formed to the 2018-20… pic.twitter.com/Mx1pKVU2lN
— glassnode (@glassnode) June 23, 2023
Meanwhile, as stated earlier, Bitcoin's fundamentals appear to be slowly but surely improving. Bitcoin's liveliness – or circulation – remains mired in a multi-year downtrend. This sets the stage for a full-blown bull market once enough coins have been removed from circulation.
The #Bitcoin monthly Transfer Volume has overtaken the yearly averaged baseline for the first time since the LUNA implosion.
This suggests an expansion in on-chain activity, typical of improving network fundamentals, and growing network utilization. pic.twitter.com/GqzfOpE7DK
— glassnode (@glassnode) June 23, 2023
Next, Bitcoin's monthly transfer volume recently exceeded the yearly average for the first time since the LUNA crash in the summer of 2022, suggesting improving on-chain activity and growing network utilization.
Finally, do note that as per a recent NBER study, the ownership of Bitcoin and other crypto assets has increased in the US from just around 2 percent in 2018 to 12 percent as of December 2022.
New University of Chicago study finds 12% of the United States has adopted #bitcoin technology and more Democrats use crypto than Republicans.
[source: https://t.co/KgXzqFM8th] pic.twitter.com/f0E0vDyc9z
— Documenting ₿itcoin 📄 (@DocumentingBTC) June 23, 2023
Interestingly, more Democrats use crypto as compared to Republicans. This is all the more striking given the hostile attitude of the current Biden administration toward the crypto sphere in general. The paper notes:
"Those holding cryptocurrencies are different from the average population: disproportionately male with higher incomes, Libertarian or otherwise politically independent, less likely to be white, and most important quantitatively, young."
Do you think Bitcoin's growing penetration in the US bodes well for the financial health of Americans? Let us know your thoughts in the comments section below.
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