Starting early October, the number of unique addresses on the Bitcoin blockchain has seen a significant surge.
Analyst Willy Woo describes unique Bitcoin addresses with a balance above zero as “Bitcoin users.” The metric does not include addresses on centralized exchanges and only counts individual addresses that are not associated with trading platforms.
According to Woo, the rate at which the number of Bitcoin users grew accelerated following Squares bitcoin purchase in October.
Back then, as the BTC Times reported, the $75.97 billion payments conglomerate allocated 1% of its assets to Bitcoin.
Square’s investment in Bitcoin was unsurprising considering CEO Jack Dorsey’s previous investments in Bitcoin startups. In March 2018, Dorsey backed Lightning Labs, a startup that builds infrastructure around the Bitcoin Lightning Network.
The company’s Bitcoin allocation could have led the number of Bitcoin users to rise for two main reasons. First, it could have led people to believe that a new trend of institutional frenzy around Bitcoin would begin. Second, it might have encouraged retail investors to take a longer-term stance towards Bitcoin.
There are several fundamental metrics that are often used to evaluate the overall health of the Bitcoin blockchain. These metrics include the likes of hash rate, unique addresses, and daily transaction volume.
The Bitcoin price increasing in tandem with unique addresses is critical as it suggests overall user activity is supplementing the rally. The Bitcoin uptrend is being complemented with genuine retail and institutional demand, which makes it more sustainable.