Local Bitcoins volume has quadrupled since this time last year. It is presently at about 400 million per month worldwide or about 12-13 million per day. LocalBitcoins purchases should be looked at as especially bullish for the price of Bitcoin because of the premium that buyers are willing to pay to be able to get ahold of BTC. It means that they are almost exclusively hodler's or users of Bitcoin and that type of capital has the lowest turnover. Low turnover matters because every single day about 90 percent of the money coming from local bitcoins is new money that is adding to the demand for coin and is unlikely to sell for a long time. That eventually eats away at supply slowly but surely.
Coinbase is the retail level of bitcoin purchasing. During December of last year Coinbase had 400 million dollars in trading revenue. So if you put their average fee at about 2 percent of a trade, means about 20 billion dollars in btc. was traded in that one month alone. Since December Coinbase has increased the number of support people by 500 people. The number of new users to the site is approaching 30 million. Which is about 66 percent higher than in December. The ratio of buyers to sellers on Coinbase is 80/20 and the average purchase of a buyer is $ 428 dollars. What matters to the bull case of bitcoin are people that are buying Bitcoin as an investment and who aren't instantly trading it when the price moves up. If GDAX does 300 million in volume per day and that includes Coinbase volume in that number, than it's fair to say that about 50 million per day is being added to long term positions per day.
The exchanges have a lot of new customers around the world. Combined they are doing about 5 billion per day in volume on btc. in total. What percentage of that are new buyers that aren't trading? If that number is 1 percent which I think it's reasonable that's another 50 million per day of investment level longs that are happening.
Bitcoin ATMS are confirmed at 3 million dollars per day new money with 90 percent one way invested. Over 3k ATMS now.
The Square cash app just added Bitcoin trading last quarter and that number adds up to about 300k per day and it's only available so far in 5-6 states.
Robinhood had a waiting list with over 1 million people on it to be able to trade crypto. They have 4 million registered users.
There was recently an article that said that OTC demand was coming in at about 100 million dollars per day for large traders. If all OTC demand is taken into consideration it's probably closer to 200 million. I'm including trades between friends, family, and other trusted people. I think that at least 5 percent of that trading would be net long. So that's at least another 10 million per day.
Bitcoin.org wallets are growing at about 15k new wallets per day and about 26 million overall.
Circle says that it's doing about 2 billion a month in crypto volume.
In a growing market the law of large numbers starts to work in bulls favor. Because if it's true for instance that 5 percent buy with intention to hold for x number of years regardless of price the total number of those types of trades increases as the size of the addressable market grows. So traders have to trade above a floor that keeps moving up.
Bears lose when the price decreases because even though new user interest is lower during price lulls the total growth doesn't go away and the amount of coin that buyers can get for every dollar of fiat increases. In a increasing market FOMO kicks in and user registrations sky rocket because of all of the media attention that the price increase generates.
Bears, sellers, and short-sellers are making the new money the "smart money" by giving them a deal that is almost certain.
Think about it differently. Let's say all of a sudden by magic there were 1 billion owners or potential owners of bitcoin. It doesn't matter if they are all about to sell it. What matters is that they are involved in the market. Involvement means that they all want to own the most bitcoin that they can for the best possible price. How much effort they are willing to put into that goal influences the short term price. But the overall amount of involvement in the market is something that they cannot control. They might have very strict conditions about when they are willing to buy bitcoin. But because a certain percentage of people in the market will purchase bitcoin as a store of value for their fiat currency regardless of price, those people in total can cause the overall price to outpace what a picky trader would be willing to pay. When there is limited supply and an increasing number of participants those traders will eventually be forced to accept the conditions or stop trading at all. This dynamic is similar to forex markets. The liquidity of the underlying currency is so high that the value becomes extremely predictable. Even major news cannot harm liquidity if it exists. The liquidity determines the price not the event.
If 16-17 million bitcoins had to be divided among a group of 1 billion people because they had made involvement with crypto an economic decision in their life, consumer behavior would be the first layer that would determine the overall value. The first factor would be how much can each of them really own at this exact same price, to determine if the price will be higher when the market reaches 1 billion users. About 160 dollars worth each. But that number doesn't jibe if you have people like the Winklevosses that own 1 percent of all bitcoin. It also doesn't work if the average first purchase of a bitcoin buyer is over 400 dollars. And that's just the first purchase.
Before the market cap can reflect the instrinic value of Bitcoin the market growth has to stop. New money has to stop being added to the market. It may be true that based on transaction volume alone that bitcoin "should" be worth 10k or whatever number. But there is way more to the use case for Bitcoin than just that one purpose.
Gold has pretty limited uses as well but it's worth 7 trillion dollars because of the size of the market and not necessarily its usefulness.
Bitcoin will reach that same "irrational" result as long as new people keep pouring money into the system. Bitcoin at 5-10 trillion is not just likely it's mathematically inevitable at this rate of growth.