3 reasons why today is the perfect opportunity to buy Bitcoin

Bitcoin (BTC 2.25%) is now up over 60% in 2023 after a brutal 2022, where its price fell over 64%. Some are calling the recent jump a bullish trap in an extended bear market, but there are reasons to believe that Bitcoin’s best days are ahead.

Although its price is still more than 61% below its all-time high of nearly $69,000 in 2021, a handful of metrics show that Bitcoin is still in relatively good shape, especially considering how crazy the crypto is has gone through in the last year.

1. My favorite metric

Potentially the most important stat that flies under the radar is known as mining difficulty, and it’s currently at an all-time high.

It is one of the most valuable indicators of the token’s health because the greater the mining difficulty, the more decentralized and secure the Bitcoin network becomes. Thanks to an increase in the number of nodes running Bitcoin code around the world and more powerful mining computers coming online, mining difficulty has risen continuously since the crypto’s inception 14 years ago, regardless of price fluctuations and multiple bear markets.

As this trend continues, it shows that the Bitcoin network continues to grow in terms of security and decentralization, even in the midst of the crypto winter. Personally, I find this to be one of the most enticing reasons to invest in Bitcoin today, as investors have the option to buy it while it remains well off its highs.

2. Increased Block Size

Along with mining difficulty hitting a new high, another metric recently broke a record: block size. Assessing block sizes is important because it allows us to see how many transactions are happening on the network and therefore gauge activity.

This rise in activity is likely due to the advent of ordinals, or Bitcoin-based non-fungible tokens (NFT), which are digital representations of ownership of art, media, and collectibles. Since their introduction in January, more than 150,000 ordinals have been created. As a result, the crypto’s average block size increased by 20.5% and reached an all-time high of just under 2.5 megabytes.

An increase in block size indicates that there is a greater demand for block space; as a result, this increases the fees paid to miners. The higher the fees generated, the higher the level of remuneration for miners, and therefore the more incentive they have to secure the network.

3. Record address growth

Finally, the number of Bitcoin addresses with a non-zero balance has also reached an all-time high. Similar to mining difficulty, the growth of non-zero addresses has been relatively consistent year over year, regardless of market sentiment. As of this writing, there are over 44.6 million addresses with some amount of token. Just five years ago, that number was 23 million.

The idea is that non-zero addresses can be used as proxies to gauge network growth and usage. With this number continuing to rise, and at a rate not seen since Bitcoin hit an all-time high in November 2021, there is good reason to believe that perhaps this crypto winter could well be starts to thaw.

RJ Fulton has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a disclosure policy.

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