Zack Voell, a prominent crypto market researcher, has opined that while the pioneer cryptocurrency may be in a bear market in terms of price, there are signs to indicate that it is seeing bullish adoption with regard to off-chain activity.
Voell, who is an analyst at the Bitcoin mining software company Braiins, said in an opinion piece that growth trends and supply data show that Bitcoin adoption is increasing across layer 2 protocols, Bitcoin-backed tokens, and more.
Highlighting “built-on-Bitcoin” layer 2 protocols, he notes that the growth of the Lightning Network, Liquid Network, and RSK, has been trending upwards regardless of the price direction of Bitcoin in the past two years.
Similarly, tokenized Bitcoins – Bitcoin-backed tokens used as representations of Bitcoins on other blockchains – have been showing “extraordinary growth.” An example of this is the Ethereum-based Wrapped Bitcoin (WBTC) launched by Bitgo.
The supply of WBTC has been growing over the past two years irrespective of the downward price action of Bitcoin. Meanwhile, since its launch, several other projects on Ethereum, Tron, Solana, and Avalanche blockchains have also launched other tokenized Bitcoin versions.
“The point of this data and analysis is simply to show that some people (in fact, a consistently growing number) see value in choosing to use their bitcoin somewhere besides the Bitcoin blockchain — and even places outside of the Bitcoin-native economy,” he wrote.
The former Compass Mining senior mining analyst added that these use cases are just as valid as HODLing Bitcoin or using it on the native layer and could potentially be the future of Bitcoin adoption.
Bitcoin price continues to take a hit as crypto winter rages on
Voell’s comments come on the back of choppy trading in the Bitcoin market. Bitcoin is currently trading at around USD 18,700, per data from CoinGecko, down 59.5% in the year-to-date (YTD) timeframe.
According to Reuters, Bitcoin’s recent price action, which has seen the leading cryptocurrency consolidate in the range between USD 17,000 to USD 20,000 since July, could spell some trouble for investors and exchanges. This is because the price trend indicates a massive drop in the volatility of Bitcoin, thereby making it ‘boring’ to the investors who may soon seek out its rivals such as Ether.
Meanwhile, Bloomberg reported recently that Bitcoin has already been recording alarming low on-chain activity and has been seeing massive withdrawals from centralized exchanges as investors have been “going into hibernation” amid the lingering crypto winter.