RATE Group | Bitcoin Velocity Drop-Off Shows Usage as ‘Reserve Currency’
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Bitcoin Velocity Drop-Off Shows Usage as ‘Reserve Currency’

08 Sep Bitcoin Velocity Drop-Off Shows Usage as ‘Reserve Currency’

Posted at 02:40h in Bitcoin News by

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Bitcoin is “functioning well as a reserve currency” for cryptocurrency investors as its transaction volume looks set to halve in 2018, Placeholder VC partner Chris Burniske said following new analysis released this week.

2018 Market Hits Velocity

A Medium post by developer and interviewer Nodar Janashia September 5 had highlighted that Bitcoin’s token velocity, neatly described as “the frequency at which the same unit of a token is used to process on-chain transactional value,” would likely drop significantly versus 2016 and 2017.

LightChain Ushers Blockchain into the Millisecond Transaction Era

“…In 2016 Bitcoin processed approximately $58 billion worth of transactions and the average size of bitcoin’s asset base (market capitalization) through 2016 was $8.9 billion, so Bitcoin’s hybrid velocity in 2016 was 6.5 ($58/$8.9),” Janashia explains.

This tells us that each bitcoin that is in circulation has changed hands 6.5 times in order to process $58 billion worth of transactions.

He noted that this figure was not strictly…

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