Bitcoin Volumes On The Path To All Time High

Per Högberg
Mar 5, 2019 · 5 min read

Tritum Digital Exchange is building an integrated financial ecosystem to bridge digital and traditional asset markets. We strive to understand all aspects of the markets. Can existing market data give us any insight into the genuine interest in and progress of bitcoin?

We all have a clear view of the BTC price trend and from that we try to find signs of market recovery, but without a deeper understanding of the market activity we can’t make a qualified guess. Let’s now look closer at transaction volumes and figure out how that can improve our understanding of the markets.

All volume graphs in this article are from Coinmetrics.io.

Let’s start by looking at transaction volumes. The number of daily Bitcoin transactions from November 2017 to March 2019 is shown in this first diagram.

Number of daily Bitcoin transactions

We see continuous strong growth since April 2018. The number of daily transactions peaked at 400,000 in December 2017, dropped down to 170,000 in April 2018, but has since then shown a steady recovery and is now at 350,000. We are almost back at the peak! This at least indicates that there is no lack of activity in the network.

Let’s now look at how the transaction activity compares to the BTC price. The next diagram includes the price that peaked at $20,000 and is now around $4,000.

Transaction count and BTC price

As a general trend we could say that as the BTC price declines the number of transactions keep increasing. However, from this graph it is not obvious how well that correlates and why.

It is perhaps intuitive to assume that the lower BTC price will make the value of each transaction smaller and therefore we need more transactions to move a certain value. However, as a transaction could contain any number of BTC, it is not really necessary to get more transactions only because of a declining price. To understand this better, the next diagram shows us the average transaction size in USD.

Transaction count and average transaction size

The average transaction value peaked at $100,000 and has now come down to $8,000. This is in line with the logic that a lower BTC price gives smaller transactions. It also highlights the fact that more transactions doesn’t automatically mean more volume.

Here it is very interesting to observe the short term trend. The 2019 YTD trend is a continuous strong growth in the number of transactions, but the average transaction size is actually not declining anymore.

A weakness with looking at the average transaction value is the fact that it is an average. A few very large transactions will quickly affect the average and not show us what a more typical transaction looks like. Therefore let’s take a look at the next diagram with the median transaction value.

Transaction count and median transaction value

Here we compare the transaction volume with the median transaction value. The median gives an understanding of what most transactions look like as opposed to the average value that is very much influenced by a small number of very big transactions. As expected, with the falling BTC price the median transaction value has also dropped. We peaked at a value of $3,000 per transaction and are now down to $60.


We have now learnt some interesting facts from studying the transactions in more detail.

To start with, the intuitive understanding of the trends still make sense. A drop in BTC price gives a drop in the transaction size and as a consequence we get more transactions. However, we can see that the BTC price has dropped 5 times, the average transaction value has dropped 12 times, but the median value has dropped 50 times. Of some reason the size of the majority of transactions are falling much faster than the BTC price, at the same time as the number of transactions increase quickly. This shows us that there is more than the price that drives the growth.

It is also interesting to learn how in 2019 the median transaction value has stabilized at around $60, while at the same time the number of transactions are growing quickly.

Could this increase in the number of small transactions be a sign that bitcoin is actually being used more actively for real payments? That would be a real sign of strength. However, the development could also be driven even more by the many new exchanges fighting for visibility and trying to get their volumes up by sending false transactions. The combined Bitcoin trading volumes reported by exchanges is around $7bn per day, far more than the $3bn volume on the Bitcoin blockchain. However these trades are netted and reported to the blockchain, they will have a big impact on transaction data.

To fully understand how the trends we observe are caused by genuine adoption of Bitcoin as opposed to market manipulation, we would need more transparency into the details of the markets. Getting more insights into what activity we have on the network, will have to start with more reliable and regulated exchange trading. At Tritum we are passionate about creating a more transparent and efficient market. Do you have more insights into network activity? Please leave a comment and share your thoughts.


The author is a co-founder of Tritum Digital Assets and a former Vice President of Nasdaq and Head of Economic Research, responsible for reporting all volumes of Nasdaq’s Nordic Exchanges. He is also a former Finance Director of the US Consolidated Plan, the UTP Plan. The plan governs transaction information from all US securities exchanges, is approved by the SEC and provides millions of investors with reliable data.

Institutional Digital Asset Trading Exchange and Services www.tritum.digital

Per Högberg

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Tritum Digital Assets Blog

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