November will be a month to remember for bitcoin investors. The flagship cryptocurrency’s price plummeted, struggling to break above $4,000 (£3,134) on the last day of November, after starting the month well above $6,000 (4,701), according to CoinDesk.com data. This was bitcoin’s worst drop since April 2011, when the cryptocurrency fell about 39 percent.
But despite this bitcoin price decline, a cryptocurrency industry insider believes the core fundamentals of the network backing bitcoin are undoubtedly booming.
Anthony Pompliano, partner at crypto investment firm Morgan Creek Digital Assets, said that media reports of the death of cryptocurrency are nothing more than a surface level observation, rather than logical analysis.
Mr Pompliano said: “Fortunately, nothing could be further from the truth.
“The fundamental drivers of the decentralised technology network are actually growing.”
Mr Pompliano, known as “Pomp” within the crypto industry, drew attention to indicators signalling how the underlying fabric of Bitcoin is actually growing, rather than shrinking, in correlation with prices.
Factors include the growing number of users on Blockchain.com, which has mushroomed from 10 million in late 2016 to 32 million – a staggering growth rate.
The number of wallets has also exploded, as has the total Bitcoin transaction count – swelled by 33 percent in the past year.
This is attributed to the adoption of the asset for payment and speculative purposes.
Mr Pompliano also underlined the rapidly growing “number of transactions excluding popular addresses,” indicating bitcoin has found itself used actively in innovative systems or via payment networks.
And contrary to popular belief, the average bitcoin transaction fee continues to fall, from £40) ($52) in late December 2017 to just £0.47 ($0.6) today.
Despite the recent decline in hash rate – measuring the amount of power the bitcoin network consumes –, from a long-term perspective, things are looking positive, as the hash rate has quadrupled in the past year alone.
Additionally, from a logarithmic chart view, the recent decline is just a drop in the bucket.
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Mr Pompliano’s analysis ended by focussing on the number of active bitcoin nodes, pointing out that this figure has risen by 98 percent in the past two years to 10,510.
Bearing all this in mind, Mr Pompliano explained that this innovation is set to continue, adding that traders should not be distracted by the price, and should instead focus on the fundamentals of the network backing bitcoin.
He said: ”While the bitcoin price is important, it is not an important measurement of future value.
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“The underlying fundamentals for the blockchain appear to be growing stronger despite the decline in the current price.
“Bitcoin isn’t going anywhere.”
Mr Pompliano’s bullish comments recently followed an interview where he reiterated his faith in digital assets, describing cryptocurrencies as the best performing asset class in the past decade, even ousting the US equities market, which has been on its longest and most notable bull run in decades.
Bitcoin Market Price Chart in RealTime