Bitcoin Speculative vs Transactional Demand

Some thoughts on the price of Bitcoin around the time of the halving...

So far nearly all of the price movements we have seen in Bitcoin have been due to speculative demand, not transactional. Bitcoin in regards to transactional demand is purely a utility, and is entirely disconnected from the price in relation to other fiat currencies. No matter what the price is, transactions will still take place over the blockchain. Any time there have been large shocks to the transactional supply of Bitcoin, it has been followed by a large spike in price. Why is this? Because everyone had to re-enter the market and buy Bitcoin to use for transactional purposes. An increase in transactions combined with speculative buying can lead to exponential price increases. People who speculate on the price of Bitcoin need to keep in mind the fundamentals that drive the price, transactional volume being a big one. Bitcoin ( and other scarce resources ) have the rare attribute of obtaining increased demand with value increase. People want more Bitcoin the higher the value goes.

The average daily transaction fees for Bitcoin is currently over $20k, that is up from$250 just over 3 years ago. That is a huge bullish indicator for the velocity of Bitcoin transactions. That is REAL money that people are spending to use Bitcoin! If that isn't validation....

Bitcoin is moving hands.