The Bitcoin network surpassed 1.2 million active addresses for the first time in its history in 2020. The rise stood at 105%, according to the latest report State of the Network by analytics firm Coin Metrics.
Data: Coin Metrics.
During 2020, Bitcoin’s market capitalization rose by more than $300 billion, and the number of addresses holding more than 0.01 BTC increased by more than 700,000.
Analysts at Coin Metrics attribute this surge to a wave of institutional interest and forecast the trend continuing into 2021.
“Soon after institutional investors began pouring money into Bitcoin, its price rose. In a rapidly changing world, Bitcoin is increasingly seen as a hedge against inflation and a form of digital gold,” the report says.
The price rise alongside the growth in active addresses points to organic, not speculative, network development and adoption. While the appearance of active addresses signals new participants, the report notes that older addresses remain active.
Data: Coin Metrics.
“In many respects, Bitcoin is approaching the end of 2020 in its strongest position. As the momentum of institutional adoption continues to gain pace, Bitcoin is on the cusp of reaching unprecedented highs in 2021,” the analysts conclude.
Earlier this week MicroStrategy bought an additional 29,646 BTC for $650 million. The value of the cryptocurrency the analytics software provider has purchased this year is estimated at $1.6 billion. Total expenditure on its purchases stands at $1.125 billion.
Another major institutional player backing Bitcoin was insurance company MassMutual. In early December it invested $100 million in the first cryptocurrency.
According to analysts at JPMorgan, following MassMutual’s lead, family offices, pension funds and other large investors could direct up to $600 billion into Bitcoin.
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