A crypto analyst that goes by name PlanB tolt his 45k followers that bitcoin network velocity has a significant increase during the past months showing a screenshot with data from his node
Oops, I had acounting error in my script: it is not reset to zero each month, so cumulative .. Thank you very much @ziggamon for pointing it out!! These are the new numbers, still a nice uptick and ATH of 800,000 utxo per day! pic.twitter.com/9VvogdF3cz
— PlanB (@100trillionUSD) October 23, 2019
By network, velocity is meant how actively each BTC moves in the blockchain and is expressed in UTXO.
By “UTXO” is intended the “unspent outputs” which are a result of a transaction that a user receives and can be spent in the future.
Here it is the Investopedia definition for UTXO:
“UTXO stands for the unspent output from bitcoin transactions. Each bitcoin transaction begins with coins used to balance the ledger. UTXOs are processed continuously and are responsible for beginning and ending each transaction. Confirmation of transaction results in the removal of spent coins from the UTXO database. But a record of the spent coins still exists on the ledger.”
On the other side Byte Tree CEO, James Bennet thinks that we have a decrease in the network velocity according to a report by bitconist which points that is this slowdown of the network caused the actual drop in bitcoin price.
“Velocity has been slowing significantly over the past weeks as transaction volume moves over to stablecoins such as tether. Ultimately, this depressed demand for the bitcoin network has lead to this recent drop in price.”
Maybe Bennet is using a smaller time frame to calculate the velocity.
However, since this year ATH in July velocity might have slowed down because BTC’s actual share in trading volume is 29% while USDT has a bigger share by 35% and this is maybe because money may have flood in stablecoins after the $14,000 back in July.