The FTX scandal has certainly sparked a lot of controversy in the crypto space. The crypto market was shaken to its core when FTX collapsed in early november 2022 resulting in billions of dollars being lost and pushing the total market cap below a trillion. This has led to an influx of investors wondering if Bitcoin’s historic bull run will continue.
The crypto community has long been divided on this issue, with some believing the market is still in a bull cycle while others predict it could be the end of Bitcoin’s growth. Predictions aside, the truth remains that demand for Bitcoin and other digital assets is still increasing, and there are several reasons why this could lead to a new all-time high for BTC.
For one, Bitcoin has become increasingly recognized as an asset class, which means that more institutional investors are likely to invest in it. This could push the price of Bitcoin.
Now an increasing number of investors asking themselves whether or not increased demand for Bitcoin ordinals will push BTC to a new all-time high, it’s an interesting question to consider.
If you’re thinking to purchase bitcoin online, keep an eye on the latest developments in the crypto space and know the risks associated with buying, selling, and trading cryptocurrencies.
What Are Bitcoin Ordinals, Anyways?
Even as the U.S. becomes increasingly hostile towards digital currency exchanges and their staking programs, Bitcoin has surged to its highest value since August 2022 – nearly $24,300, according to CoinGecko.
Experts point it to Bitcoin Ordinals. The Bitcoin market is currently thriving due to the immense levels of activity brought on by Ordinals, a unique kind of non-fungible token that can be stored directly onto the Bitcoin network. With these new collections being produced faster than ever before, it has driven up demand and pushed us towards record highs.
According to the latest figures, the number of Ordinal inscriptions has surpassed the 100,000 mark. What’s even more remarkable is that Ordinals are inscribed directly onto the blockchain, ensuring an immutable record of all transactions.
There’s another metric that’s maybe contributing to the price hike of Bitcoin – Unspent Transaction Output (UTXO).
What Is Unspent Transaction Output (UTXO)?
UTXO stands for Unspent Transaction Output, and these are the individual units of bitcoin (sats or satoshis) that have been locked in transactions on the blockchain.
Bitcoin’s UTXO count is steadily climbing and looks to exceed its previous peak of 84.6 million, last seen in November 2022 when traders frantically scrambled away from FTX’s tumultuous downfall.
When a bitcoin transaction takes place, coins are sent from one address to the other and any leftover amount is returned to the sender in UTXO form. These same UTXOs can then be used for forthcoming transactions, verifying that the sender has sufficient funds available for payment.
This surge of UTXO could be explained by an uptick in smaller, retail-level interactions with Bitcoin. This also suggests that more individual users – not whales or big investors – are engaging on the blockchain platform right now.
Will Increasing Demand For Bitcoin Ordinals Push Btc To A New All-Time High?
Ultimately, it’s impossible to say whether or not increasing demand for Bitcoin ordinals will push BTC to a new all-time high. However, one thing is certain; the market is still showing signs of strength, and with more institutional investors looking to get involved with Bitcoin, it’s possible that the demand will continue to grow.
While it’s impossible to predict the future of cryptocurrencies, one thing is certain – the crypto market is filled with unique opportunities and potential for investors who are willing to take risks. With growing demand in both retail and institutional settings, Bitcoin could be on its way to another all-time high.
UTXOs have seen impressive growth in the last two years, despite suffering a brief setback when FTX induced crypto collapse at the end of 2022. However, these tokens experienced swift resurgence as bitcoin prices soared through January.
UTXOs serve as evidence that, despite a fresh wave of people engaging with bitcoin due to Ordinals, whales are still devotedly HODLing. “Hodling” refers to the buy-and-hold strategy in crypto-financial lingo. This could be an indication that many investors are confident in the future of bitcoin and cryptocurrency as a whole.
According to CoinDesk’s previous reportage, the proportion of UTXOs older than five years has augmented by outrageous 17% in just last half-year!
But What Implications Does This Dynamic Have On The Cost Of Bitcoin?
On one end, when a vast number of strong holders and an emerging group of retail consumers clash together, in theory it’s highly possible the price of Bitcoin may rise up. Nevertheless, others remain uncertain.
Despite an upsurge in on-chain activity, Tony Ling—co-founder of data portal NFTGo and partner at Bizantine Capital – is not convinced that the demand from Ordinals is strong enough to cause a rise in Bitcoin’s price.
Ling emphasizes that Bitcoin’s rapid appreciation can be attributed to an influx of USDT, rather than heightened demand on the network caused by usage. Furthermore, since there isn’t a developed marketplace in the bitcoin space yet, he is very confident that there isn’t any real buying and exchange demand for the cryptocurrency.
Despite this, Ling remains confident about the price of bitcoin and predicts it to reach a range between $30,000-$35,000 in late 2024. However that’s still far off into the future.
So What Is The Takeaway Here?
The takeaway here is that, while the increase in UTXOs is a good sign of Bitcoin’s stability and growth potential, it’s too early to say whether or not this will have a direct impact on the price. As with any investment, investors should do their due diligence before getting involved and be aware of market trends and news.
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