The month of January 2024 marked a new record for Bitcoin trading volumes on the blockchain. According to data from Arkham Intelligence, the total dollar volume was over $1.2 trillion, the highest since September 2022, when the FTX speculative bubble was still ongoing.

The volume in January 2024 tripled compared to that of September 2023, when it had fallen below 600 billion, and exceeded that of December 2023, when it was back above one trillion. These levels are in line with those of November 2020 and December 2017, i.e. the peak months of the two previous bull runs.

Factors That Contributed to the Volume Boom

The boom in Bitcoin volumes in January 2024 was driven by several factors, including strong demand from institutional investors, the growth of Bitcoin-based ETFs, increased adoption by countries such as India and Brazil, and price stability above $50,000.

Consequences of high volume: rising fees

However, the high volume also resulted in an increase in network fees, which averaged $15 per transaction, double the amount in December 2023. This could limit the use of Bitcoin for small-value transactions and incentivize the adoption of second-layer solutions, such as the Lightning Network, which offer greater speed and lower costs.

ETFs: the main focus for Bitcoin

Most analysts expect BTC to experience a price correction before resuming its rise, and this scenario remains the most plausible until the $44-45k recovers.
However, BTC benefited from some bearish factors that failed to push it to lower levels, such as selling pressure from GBTC.

If BTC were to break above $45,000, then the next target would be $60k, the all-time high reached previously.

A key factor for BTC’s rise could be the continued improvement in spot ETF data, which over the past week has shown a sharp reduction in outflows from GBTC, and an increase in inflows for BlackRock and Fidelity products.

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