Bitcoin has lost its utility?

I've been trying to understand why do we have a sudden Bitcoin price raise in 2024 and I can't find any good basis for it.

1) Retail and general crowd doesn't seem to be interested in Crypto after previous bull run.

While Binance has slightly increased traffic, the amount is incomparable to a previous bull run

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2) Exchanges inflow / outflow is declining

In comparison to a previous bull run, when there was clear increase in Exchanges BTC in and out flows.

This cycle I can only see a steady decline in both flows with no correlation to BTC price.

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3) BTC On-Chain token transfer flow is all time low

Since previous market crash, the amount of daily transferred tokens is very low and has no correlation with BTC price. Which can be treated as an indication that people don't transfer BTC anymore

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4) BTC ETFs volume had an increase, but the size is incomparable to increased BTC Market Cap

While we do see some institutional interest in BTC, total managed ETF size has increased from $30B to $60B since January, which is incomparable to $400B -> $1.3T BTC Market Cap increase

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While we see a steady decline in public interest, we also see a huge increase in BTC Market Cap since the last year. Personally, I can only see 2 reasons why BTC had a big rally this year.

Possible explanation #1 – futures gambling

BTC has lost its utility and became a gambling instrument for short term futures traders. While the amount of transferred tokens is low, we can see a significant increase in Open Interest on BTC Futures market, and BTC price has significant correlation with futures trading volume

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Possible explanation #2 – new USDT is printed every day to buy and be backed by BTC

BTC is mostly traded against USDT. While we see a steady increase of USDT Market Cap over this year, we don't see same increase in USDT daily transferred amount.

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We also see a decline in USDC Market Cap since previous bull run

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Additionally to that, we can see that Bitfinex (a sister company to USDT) exchange has a very large pool of BTC in the exchange, which is incomparable to their daily traded volume

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Conclusion

While we see a steady decline in crypto interest in retail market, but we also see a new ATH and a very large Market Capitalization.

One possible explanation could be a switch from Spot to Futures market, where average crypto investor can gamble away their capital utilizing the power of margin.

Another possible explanation is USDT to USD 1:1 rate is a myth, new USDT is being printed to both buy and elevate BTC price to eventually use new investors attracted by high returns as exit liquidity, increasing negative outlook of crypto in general.

Very curious what do you guys think about it?

3 thoughts on “Bitcoin has lost its utility?”

  1. Bullshit.

    USDT is not backed by BTC. They use part of their quarterly profits to buy BTC – and that BTC is used as RESERVE backing of USDT. But this will likely never be touched.

    USDT is backed by mostly T-bills, bonds, and cash as you can see on their transparency page and as attested by their auditor BDO Italia.

    Anything that goes beyond the 100% backing is considered reserve backing, so that they can claim USDT is overcollateralized.

    USDT printed by tether is, obviously as you can see, backed by dollars (that’s part of the 100% full backing). And even a good chunk of the 100%+ (overcollateralized) backing is dollars.

    The answer you are seeking is that Bitcoin always has and always will be an absolute shitcoin, technically speaking, with zero application. You can’t use it for transactions and payments properly because of insane fees, slowness and unpredictability of when a transaction will go through. It’s not programmable either, it’s not very decentralized at all and no change to the protocol can happen because the stupid Bitcoin community is so bigoted and narrow-minded that they do not accept nor allow any changes and improvements to the protocol.

    Bitcoin today is SOLELY used as an investment vehicle for speculative investments in the form of an uncontrollable asset. That’s it’s sole use. So yes your theory with perp trading might have some touch here, but mostly, Bitcoin is a useless piece of garbage that serves no purpose besides investing

    So saying “Bitcoin has lost it’s utility” is totally false. It never had any.

    And for all the people about to comment on me: No lightning is NOT the solution. Lightning cannot be used without using the mainchain and therefore it will never take off. Furthermore it’s insecure. And no, Stacks is not a Layer2, it’s a standalone network with Bridge to the Bitcoin mainchain. And no, runes and inscriptions don’t solve anything, they are hot garbage.

    Bitcoin has so many issues, none were ever addressed. Because you cant push any changes anyways.

  2. The bull run is only just beginning. The average punter gets interested when it passes 100k, 250k, 500k.

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