These 3 Metrics
Happy Bitcoin Friday! — Mar. 14, 2025
These 3 Metrics
I watch three metrics in bitcoin.
Price
Hashrate
BTC Dominance
Bull or bear market, these are the three metrics that matter most when it comes to understanding what is happening in terms of bitcoin adoption.
Bitcoin isn’t just an investment. It isn’t just new tech. It isn’t even just a hedge or store of value asset. Bitcoin is many things and there are three metrics that can give you a general sense of the future health and success of bitcoin and the bitcoin network.
1. Price
Regarding the price of bitcoin:
price is just a number
but, it’s the simplest metric
it’s an indicator of broader trends
Price is like the needle of a compass.
It’s the easiest and quickest way to gauge what’s happening in bitcoin, crypto, and traditional markets. Plus, price can provide insight into broader bitcoin adoption as you track it over time.
After all, adoption matters most.
There’s nuanced ways to measure bitcoin adoption but it’s difficult to determine exactly how many bitcoiners exist. One individual or entity can have countless bitcoin wallets. Price (and bitcoin’s market cap) is a 30,000 foot way of determining mainstream interest in bitcoin, regardless of how and why people are adopting it.
Price is also a marketing engine.
Bitcoin is decentralized.
No one controls bitcoin. Every bitcoiner or participant in the bitcoin network plays by the same rules. There’s no company behind it. No CEO. No President.
Price is a way to attract newcomers. Price appreciation serves to increase bitcoin adoption and usage. “Number go up” is an organic marketing campaign.
The saying goes:
come for the price action
stay for the revolution
2. Hashrate
Regarding hashrate:
shows health of network
shows security of network
provides insight into miners
Hashrate is a look at the actual bitcoin network itself. It’s another way to view adoption and shows how much computational power is on the network.
Generally, more hashrate means:
greater security
more participants
increased adoption
Miners are the source behind hashrate.
More miners online, solving complex math problems on the network, means that the network is more secure and more difficult to overpower or attack.
Hashrate tends to increase more rapidly than price. That’s because price is impacted more by external market factors and trading. Hashrate also has the benefit of being the result of a highly specialized and dedicated cohort of bitcoiners—miners.
Mining grounds bitcoin in the real world. Mining makes bitcoin unique and more decentralized than any other proof of stake cryptocurrency network.
Miners dedicate their time, money, and hardware to solving math problems on the network. When they do so, they batch transactions into block and record them on the blockchain. They earn bitcoin as a reward for their efforts.
Price fluctuates.
Hashrate is more parabolic.
If price is the needle of the compass, hashrate is the true north. Parabolic hashrate appreciation makes bitcoin more and more inevitable in the future.
3. BTC Dominance
Regarding bitcoin dominance:
btc’s share of the crypto market
shows btc vs. crypto interest
provides insight into market cycles
BTC dominance is bitcoin’s share of the total cryptocurrency market. In bull markets or periods of extreme volatility, bitcoin dominance tends to rise.
When bitcoin started, it had 100% share of the total crypto market because it was the only widely adopted cryptocurrency to exist.
Over time, ethereum and other cryptocurrencies came into the space and took share from bitcoin. Despite the advent of thousands of other cryptocurrencies though, bitcoin continues to demonstrate its desirability over smaller and more speculative cryptocurrencies.
Bitcoin is both an on and off-ramp for other cryptocurrencies as well as a safe haven for cryptocurrency traders in times of extreme volatility.
As we encounter more four-year market cycles based around the bitcoin halving, it will be interesting to see what BTC dominance is at each of these intervals.
The fourth bitcoin halving was in April of 2024 and bitcoin has steadily risen back to take a majority share of the total cryptocurrency market.
Conclusion
I watch these metrics:
They are a starting point.
They represent some signal.
Much of crypto markets is noise.
Keep learning.
Use bitcoin.
Try self-custody.
Read my Bitcoin 101 Guide for more:
Enjoy the weekend!
I am not an investment or financial advisor. All opinions expressed are mine alone. Read the full DISCLAIMER on the About page.
HODL on Garth.