By : Ameen Kadry
Despite challenging economic conditions, 2023 has been a fantastic year for Bitcoin. The price of the world's largest and most expensive cryptocurrency surged by almost 150% since the beginning of the year, surprising many investors who claimed the crypto market was dead. But besides doubling in value, Bitcoin has also seen a long-awaited rebound in the number of active addresses.
According to data presented by AltIndex.com, after falling for two years in a row, the number of active BTC addresses increased by 2.6 million in 2023.
Increased Attention from Mainstream Investors Brought More Activity in Bitcoin's Network
Many agree that 2023 will be remembered as a turning year for Bitcoin despite the significant global headwinds. After being at the center of the crypto price crash, losing millions of active addresses and billions in market cap, BTC drew a lot of attention from mainstream investors this year, helping it not only to double its value but to reshape the global perception of digital assets.
Investor's confidence in Bitcoin was boosted by the failure of mainstream investments, including the collapse of Silicon Valley Bank, pushing them to search for more transparent, alternative investments. The news of BlackRock's BTC ETF application brought even more institutional interest in the crypto market, helping BTC to regain practically all its losses from last year.
The surging interest in BTC has also driven a lot of activity in Bitcoin's network and brought a rebound in the number of active addresses after two years of decline.
According to data from crypto analytics platform Glassnode, the number of active BTC addresses constantly rose between 2013 and 2017. In fact, 2017 saw the highest annual increase in the market's history, with over nine million new active addresses that year alone. But after losing almost 75% of its value in 2018, the number of active addresses plunged by 9.7 million, the biggest drop so far.
Statistics show 2019 and 2020 brought a recovery, with the number of addresses rising by 2.3 million and 6.6 million, respectively. But it was a downhill from there, with Bitcoin's network seeing two consecutive years of a huge activity drop.
Many so-called "market tourists" fled from Bitcoin amid the crypto winter, causing the total number of active addresses to drop by more than three million in 2021. The negative trend continued last year, with Bitcoin's network losing another 695,000 active addresses.
Although the number of active addresses significantly recovered in 2023, rising by 2.61 million year-to-date, that's still not enough to recoup the loss from the past two years. In December 2020, Bitcoin's network counted 20.8 million active addresses or 1.1 million more than at the end of this year.
Almost 90% of Bitcoin Addresses are in Profit
As one of the top performers in the crypto space this year, Bitcoin also saw a huge increase in the number of investors with positive returns. The Glassnode data show that in December last year, 51.4% of BTC addresses were profitable. Bitcoin's price stood at around $16,500 at that time. Over the past twelve months, the number of addresses in profit jumped by 48%, reaching 89.6% last week.
