The pioneer cryptocurrency may be in a bear market in terms of price, but there are indications that it is seeing bullish adoption with regard to off-chain activity, according to noted crypto market analyst Zack Voell.
According to Voell, an analyst at the Bitcoin mining software provider Braiins, supply statistics and growth trends indicate that more and more layer 2 protocols, Bitcoin-backed tokens, and other products are adopting the cryptocurrency.
In highlighting layer 2 protocols that are "based on Bitcoin," he points out the growth of the Lightning Network, Liquid Network, and RSK has been heading upward over the past two years regardless of the movement of Bitcoin's price.
Similarly, the Ethereum-based Wrapped Bitcoin (WBTC) launched by Bitgo is one example of the "exceptional rise" of tokenized Bitcoins, which are Bitcoin-backed tokens used as representations of Bitcoins on other blockchains.
Despite the decline in Bitcoin's price over the previous two years, the quantity of WBTC has been increasing. Since its debut, a number of other projects on the Tron, Solana, and Avalanche blockchains have also released tokenized versions of Bitcoin.
In his words, "The aim of this data and research is simply to show that some people (in fact, a continually growing number) see value in opting to utilize their bitcoin somewhere besides the Bitcoin blockchain — and even locations outside of the Bitcoin-native economy.
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.
The tumultuous trading in the Bitcoin market precedes Voell's remarks. According to data from CoinGecko, the price of bitcoin is currently approximately USD 18,700, down 59.5% from the same period last year.
The dominant cryptocurrency's recent price behavior, which has seen it consolidate between USD 17,000 and USD 20,000 since July, may cause problems for exchanges and investors, according to Reuters. This is due to the price trend showing a sharp decline in Bitcoin's volatility, rendering it "boring" to investors who may soon turn to its competitors like Ether.
In the meantime, Bloomberg recently reported that investors have been "falling into hibernation" amid the protracted crypto winter as Bitcoin has already been registering alarmingly low on-chain activity and has been seeing significant withdrawals from controlled exchanges.