In today's digital currency market, Bitcoin has always been the focus of much attention. In the past two years, about 42% of Bitcoin transactions have not been recorded on the chain, which has aroused people's attention to the fluctuations in digital currency prices. Is this hidden transaction activity a key driving force for the rise in digital currency prices? This article will explore this issue in depth and analyze the mysteries in the digital currency market.

The digital currency market has always been watched by investors, and Bitcoin, as a leader, carries the expectations of many investors. However, in the past two years, about 42% of Bitcoin transactions have not been recorded on the blockchain, which is a shocking number. What does this huge proportion of unrecorded transactions mean? Some analysts pointed out that these unknown transactions may have an important impact on the price of digital currencies, and even become a driving force for price increases. So, how do these hidden Bitcoin transactions affect the market?

First, let's take a deeper look at these unrecorded Bitcoin transactions. These transactions often occur in some secret trading platforms or private places, away from the public eye. The anonymity and decentralization of Bitcoin facilitate such unknown transactions, allowing both parties to complete the transaction without leaving any traces. This privacy also provides opportunities for some illegal activities, such as money laundering and smuggling. Therefore, the existence of these unknown transactions not only casts a veil of mystery on the digital currency market, but also brings challenges to supervision and compliance.

In general, about 42% of Bitcoin transactions in the digital currency market are unknown, which is a topic worthy of in-depth discussion. This phenomenon not only reveals some shortcomings of the digital currency market, but also reflects the diversity and complexity of the market. For investors, they need to remain vigilant, invest rationally, and not be influenced by market sentiment. For regulatory authorities, they need to strengthen supervision, regulate market order, and protect the rights and interests of investors. The future of the digital currency market is full of challenges and opportunities. Let us wait and see, and witness the development and changes of the digital currency market together.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

According to Bitcoinisit on March 4, 42% of Bitcoin has not had any on-chain transactions in at least two years, reaching the highest proportion since June 2017.

(Image source: pixabay)

Is Bitcoin preparing for a big bull run?

As of March 1, about 42% of Bitcoin has not been moved on the chain (i.e., traded) in at least two years.

Since July 2017, untouched Bitcoin accounts for about 42% of the total circulation.

The Hodl Wave is an important data that can be monitored through Bitcoin unspent transaction outputs (UTXOs). Miners create a UTXO every time they mine a block reward. When a user uses Bitcoin to transfer money, the UTXO will become the input of the receiving Bitcoin address, and the sender will also receive a corresponding UTXO.

Each Bitcoin transaction consists of input (spent Bitcoin) and UTXO (unspent Bitcoin). When the sender transfers money, the UTXO becomes the receiver's input for the receiver to use at will.

Analyzing the time of UTXO used for transactions can give analysts a rough estimate of how much Bitcoin investors have hoarded. The longer the UTXO is, the greater the proportion, indicating that more Bitcoin is in cold storage and long-term storage.

Coinmetrics recently released a cryptocurrency valuation report. The report uses the time of UTXO as an evaluation indicator. They found that as of March 1, 42% of Bitcoin UTXOs had not changed in two years or more.

This is the highest number since June 2017, when Bitcoin's bull run hit an all-time high in December of that year. This may be an important indicator that Bitcoin is preparing to hit a new all-time high after the block reward halving in May.

Hoarding Curve

The hoarding curve is obtained by calculating Bitcoin Age
Days (BADs). If a Bitcoin's UTXO has not changed in 30 days, it has 30 coin days, and if it is used within 30 days, the Bitcoin's coin days will be destroyed.

Image source: coinmetric

The Bitcoin hoarding curve is mainly composed of 3 curves, among which the pink curve represents Bitcoin whose UTXOs have not changed for 5 years or more. The holders of these coins should belong to the first wave of miners, Bitcoin enthusiasts and early adopters. Of course, this also includes a large number of lost Bitcoins (early adopters lost their private keys); this kind of coin loss event was very common in the early days of Bitcoin development. Blockchain data analysis company Chainanalysis estimates that there are as many as 4 million Bitcoins that have been permanently lost.

The red curve represents Bitcoin with UTXOs of 3
~5 years. This group of Bitcoin users rushed into the market during the first and second rounds of Bitcoin bull markets, and they pushed the price of the currency to $1,200 in 2013 and $20,000 in 2017.

The light blue curve is composed of UTXOs of 18~24 months. The holders of these coins left the market during the Bitcoin bull market in 2017, but began to buy Bitcoin in the bear market and continued to hoard coins.

As the number of hodlers increases, the scarcity of Bitcoin becomes more obvious. This has increased the momentum for the price to rise, and at the same time, the upcoming halving will further reduce the supply of new Bitcoins. These two points constitute important factors that promote the surge in Bitcoin prices.

Secondly, what impact do these unknown transactions have on the price of digital currencies? In the digital currency market, price fluctuations are the norm, and the existence of these unknown transactions may exacerbate price uncertainty. Some investors use this uncertainty to manipulate the market and influence market prices through large transactions to make profits. This behavior not only disrupts the market order, but also brings risks to ordinary investors. On the other hand, these unknown transactions may also become a driving force for the rise in digital currency prices. Some investors manipulate market sentiment and create price increases through private transactions, thereby attracting more investors to enter the market, forming the so-called "panic buying" and driving up prices.

Furthermore, how do you view this phenomenon of unknown transactions? Some people believe that this unknown transaction reflects the immaturity and non-standardization of the digital currency market, which requires stricter supervision and regulation. Others believe that this unknown transaction is part of the digital currency market and a manifestation of market freedom, and should not be excessively intervened. In any case, the development of the digital currency market is inseparable from the balance between regulation and innovation, and all parties need to work together to ensure the healthy development of the market.