Bitcoin’s value has risen significantly in recent months, reaching new all-time highs and gaining increased public interest. This increase is primarily due to institutional investments, but also growing network activity. Bitcoin’s 24-hour trading volume reached $43.45 billion, and its network activity is at a three-year high.
Bitcoin’s price has strengthened by nearly 50% in the last 2.5 months, and its market capitalization exceeds 1.85 trillion dollars. It is now the eighth most valuable asset in the world, surpassing Saudi Aramco and silver. Glassnode data shows a correlation between Bitcoin’s price and transaction volume, suggesting that increased activity and use of Bitcoin can have a positive effect on the exchange rate.
The fear of missing out (FOMO) is a significant driver of interest in Bitcoin, as people are motivated to invest when they see significant price increases. This attention from mainstream media can generate more interest and attract new players. Bitcoin’s decentralized network benefits from increased activity and demand, as more actors contribute to its security.
However, an overloaded network can cause congestion or high transaction fees, potentially limiting its growth. Bitcoin’s value and network activity go through a self-exciting process, where rising prices attract more buyers, while falling prices can create panic and prompt quick exits from the investment.