Bitcoin Velocity More Than Just the Price.....

[Donk1]

​So yeah there is more to bitcoin movement than just the price chart and for a bitcoin enthusiast to actually see how much bitcoin is being used he or she must understand bitcoin velocity. So what is velocity Based on my understanding velocity is the measurement of how fast or quick money flows or changes within a specific period of time. In simple terms when you purchase an item from a seller ,the seller uses the money to purchase another item from someone and like that it continues this is called high velocity. But then when you hold your bitcoin or you save money in the bank this is called low velocity. This entire process, to me can be called .....The circulation intervals....

​The Exchange Problem

Based on my research when calculating velocity if you use data from the blockchain the numbers will definitely come out confusing and this is because of exchanges like Coinbase and Binance move huge amounts of bitcoin in their own internal wallets based on security measures, and when a user buys or sells their bitcoin on the exchange the transaction doesn't happen on the public blockchain but on the exchange's private database resulting in a fake movement or abnormality because the money never left the exchange, it's more like transferring money between two of your accounts still it's still your account. That said the money was moved but it wasn't spent or sold to anybody.... Check out this link as proof
https://stripe.com/resources/more/onchain-vs-offchain?hl=en-GB

​How to Measure Non-Exchange Movement

I believe to truly understand bitcoin price movement, we must look away or beyond what exchanges show us and focus on the on-chain movement which includes...

1) Peer to Peer Payments:the sending of bitcoin from one person to another.

​2)Merchant Payments: using bitcoin for direct payments of goods and services to places that accept it.

​In other words measuring non-exchange velocity helps us analyze the market fluently whereby low non-exchange velocity means there are more holders than sellers, which indicates that bitcoin is currently being a store of value. But when the non-exchange velocity is high it means bitcoin is being used as a medium of exchange that brings utility. Overall by looking beyond exchanges we would be able to know if bitcoin is growing as a medium of exchange or as a store of value.that's all for me..... Check out this link
Bitcoin On-Chain Transaction Volume (The Block)
https://www.theblock.co/data/on-chain-metrics/bitcoin?hl=en-GB

[casey15]

This is a good breakdown.. but I think the concept of Bitcoin velocity is still very tricky and still not as straightforward. Non-exchange transactions can also include batching, self transfer as you have illustrated, or even institutional custody movement. So even when you exclude exchanges, it still doesn't fully solve the measurement problem. Maybe the challenge isn't just about filtering the data but it is to really define what counts as economic activity on the chain. It would be interesting to combine the non-exchange idea with metrics like active addresses or UTXO age band to get a clearer picture of what real economic activity is.