Charlie Morris, chairman of ByteTree, provided a macro view of onchain data over the past week using a new method to capture transaction volume. He said that with the blockchain, transaction data is subjective for various reasons.
(39:30) “Our new methodology strips out a lot of this fake traffic; well not fake traffic, but confusing, obfuscating traffic that’s been recurring over the summer and brings it back down. You can see that in the chart…It’s not just the fact that we’ve managed to get rid of some of this traffic, we’ve identified new types of traffic, which are also interesting.”
Morris also illustrated the difference between the complex and batch spend, saying:
(40:04) “The complex spend really is the attempt to look for privacy. So you’ve got these transactions that look much larger than they actually are economically. So there could be $100 million moving around but actually there’s only $5,000 in each and every transaction…And the other one is batching. So batching can be used by legitimate organizations like Coinbase, for example, to save their customers money they might put 100 different transactions together.”
Bitcoin’s highest returns are when the velocity is above 600%.
(43:05) “Whenever the velocity of the network is above 600%, you tend to make quite a lot of money. In this particular chart, bitcoin’s up 10x or a bit more since 2014…and it’s up another 5x if you’re invested when the network was above 600%. And whenever the bitcoin network velocity was below 600%, it was never profitable. Ever…The lesson is very simple: A lively network is a valuable network.”