Bitcoin’s price is soaring, exceeding $107,000 and hinting at a new all-time high. But this bull market is surprisingly different from previous ones.
A Less Active Bitcoin Network
While the price is climbing, the Bitcoin network itself isn’t buzzing with activity like it usually does during bull markets. This is a significant departure from past trends. CryptoQuant expert Darkfost points out this unusual quietness on the blockchain. Previous bull runs saw tons of transactions, new addresses popping up, and high network fees. This time? Not so much.
This is the first Bitcoin bull market without a corresponding surge in on-chain activity. It’s a major shift.
Fewer Active Addresses: A Cause for Concern?
The number of active Bitcoin addresses has been dropping steadily since its peak in 2021. We’ve seen a significant fall from 1.5 million active addresses to around 740,000. Fewer wallets are interacting with the network, suggesting less widespread participation.
This decline raises questions about how long this rally can last.
The Impact of Bitcoin ETFs
Historically, Bitcoin network activity picks up after a bear market. But that hasn’t happened since 2023. Darkfost suggests that the launch of Bitcoin spot ETFs might be a factor. Many investors might be choosing the convenience and security of ETFs over directly holding Bitcoin. This avoids the hassle and risks of self-custody and managing transactions.
This shift in investment strategy could significantly impact on-chain metrics.
Speculation vs. Broad Adoption?
With fewer active addresses, there’s speculation about what’s driving this rally. Is it primarily driven by speculative trading and institutional investors, or is there still broad user participation? The unusually low network activity suggests the former might be playing a larger role.