Bitcoin's 2024 Horizon

As we head towards 2024, with its pivotal Bitcoin halving event and burgeoning ETF approvals, one key metric to watch is the number of Active Addresses over 30 days—a not perfect, but representative indicator of active users on the Bitcoin network. While there was significant growth during the 2017 bull run and a substantial fall in the subsequent bear market, this figure has rebounded, hitting 66k again during the 2021 bull run. In the following downturn, we saw a decline, but not as sharply as in the previous bear market, which bottomed out at 33k, with this time settling around 44k.

Analyzing the trend, it's clearly on the rise, though its growth is not exponential; rather, it tends to stabilize. This means that the base of active addresses (what we would call demand in a microeconomics class) is growing—there are more and more users. However, what I find most significant about this chart is that the price requires an increasingly smaller user base to climb. For instance, when BTC hit its low in November 2022, we had 48k active addresses. Today, with just 5k more active addresses (53.7k), the BTC price is at 44k. This is quite telling.

Another metric I like to consider is the number of addresses with a non-zero balance.

A Milestone in Digital Expansion

Bitcoin has eclipsed a landmark that speaks volumes about its adoption: over 50 million addresses now hold a balance greater than zero. This isn't just a number—it's a testament to Bitcoin's burgeoning role as a burgeoning digital monetary network.

A Surge in Network Transaction Fees

But it's not just the user base that's expanding. This week, we've witnessed Bitcoin transaction fees hit a historic high, topping out at a breathtaking $23.6 million in a single day. The catalyst? A resurgence in ordinals inscriptions, sparking over $175 million in transaction fees and demonstrating the network’s growing financial clout (by the way, I hate ordinals...).

What Does This Mean for Bitcoin's Future?

The surge in transaction fees is fortifying Bitcoin's infrastructure, as miners are incentivized to amplify the network's security by plugging in more machines. This increase in mining activity is a pivotal response to the so-called "security budget issue," ensuring that Bitcoin's fortifications remain robust even as we approach the era of fully mined supply.

Bitcoin is not just enduring—it’s thriving. The network is strengthening, the user base is diversifying, and the foundational economics are shifting in real-time. As we stand on the brink of the 2024 halving, Bitcoin presents not just an asset but a narrative of growth, resilience, and an unyielding march towards a decentralized future.