The 7-day moving average of Bitcoin network transactions has declined to 330,000, hovering around 12-month lows, a significant drop from the peak of 730,000 transactions observed earlier in the network's history.
This represents a roughly 55% decrease in network activity from peak levels, suggesting a notable shift in how the Bitcoin network is being utilized. Transaction fees have stabilized around $500,000 in the last month, down from higher levels seen during periods of increased network activity before the end of 2024.
The decline appears particularly pronounced when examining the trajectory of Bitcoin-based protocols like Runes and Ordinals, which initially drove speculative attention and network activity. These protocols, which function somewhat similarly to ERC-20 tokens and NFTs on Ethereum, now account for approximately 1% of total transactions. Fee generation from Runes has dropped to less than $20,000 in the last 30 days compared to the $60 million it generated on its launch day.
Market dynamics have shifted speculative trading activity toward other blockchain ecosystems.
Trader mindshare has notably gravitated toward networks like Solana, particularly for memecoin trading. Similarly, Base has been the primary home for AI agent tokens over the past months. This migration of activity indicates that while Bitcoin remains the largest cryptocurrency by market cap, other networks are capturing specific onchain niches and trading volumes.
The current transaction levels could begin to raise questions about Bitcoin network utilization and fee sustainability. With reduced protocol activity and stabilized transaction fees, the network appears to be returning to primarily monetary transfer use cases. The sustainability of this trend may depend on whether new Bitcoin-based protocols can attract sustained user engagement once more. It is key for building out a robust ecosystem over the long term as block rewards continue to diminish.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
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