Image source: pixabay.com
New Bitcoin wallet addresses have reached a 2-year high, possibly fueled by a campaign by the Chinese government to start advocating for the cryptocurrency sector in a systematic campaign. These findings were disclosed by a market analyst by the name of Cole Gardner in a series of tweets on the popular microblogging platform Twitter.
Bitcoin addresses are like bank account numbers but instead of a bank-generated number attached to your ID card, Bitcoin addresses are large combinations of numbers and other characters that show what amount of Bitcoin is by whom. Now if the number of Bitcoin addresses increase over time, it largely means that the number of people owning the cryptocurrency are also increasing. This in turn means that the overall adoption and usage of the premier cryptocurrency are seeing a considerable uptick as well, thus contributing towards the growth of the crypto sector.
New Addresses Increasing at Unprecedented Rate
Commenting on the increasing number of Bitcoin addresses, Garner showed that over 22,000 new addresses have been added to the network in one day alone in recent memory, which is much bigger than the average number of around 5,000-10,000 per day. He made these discoveries using a simple tool provided by analytics website Glassnode.
This finding came out after analyst Willy Woo also highlighted a spike in activity in the generation of new Bitcoin wallets in the network. Woo also crucially pointed out that this activity wasn’t reflected on the actual price of the cryptocurrency and therefore, the future may witness some appreciation because of this factor as many of these new wallets will be looking to buy the cryptocurrency when the value is at intermediate level and nowhere near all-time high.
China Advertising Crypto Sector
A part of the reason why the sector is showing growth when it comes to new wallet addresses is the fact that the Chinese government which has historically been critical of public appraisal of the sector has now come out all in favour of the sector.
Garner tweeted:
“Last week the Chinese government began a coordinated marketing campaign to focus Chinese retail investor psyche on crypto. Yes, this is really happening,”
Now the governments, especially the secretive ones like China’s usually don’t go in full public advertisement mode easily as many of them see it as a threat to the strength of the local currency. China is also locked in a trade war with the United States and this tussle between the largest and the second-largest economies of the world is expected to last some time. Both China and the USA would therefore be looking to keep their local currencies stable as the war plays out. China has historically banned cryptocurrencies officially but a considerable number of deals are happening via Bitcoin through Chinese traders as the government has looked the other way. It has also invested heavily in cryptocurrency mining facilities itself as well as incentivized big miners from around the world to invest in the country and take advantage of the cheap power prices produced from large government-run power producing units. It appears that China is looking at the cryptocurrency and blockchain sectors to give it a technical edge over the rest of the world as it increases its influence in the region and beyond. The new Chinese silk road project that connects more than 20 countries across Asia and even Europe is part of this expansion.
Verdict
This considerable interest and investment into the crypto sector is already showing results and if the growth is sustained, we may be in for a price rally of the Bitcoin price index in the near future. It is therefore a good time to invest in the sector but one needs to be careful and only buy crypto from official exchanges only to avoid any possible online scams and counterfeiture.
