Bitcoin Activity Drops to 2010 Lows
28 Jun, 2024 ● Coin news
The ratio of active Bitcoin addresses has dropped to its lowest point since November 2010, according to on-chain data from IntoTheBlock.
In June, the weekly active wallet ratio fell to a low of 1.22%, peaking at 1.32%. This peak was last observed in November 2010.
Additionally, the total number of active wallets has hit multiyear lows. The week of May 27 recorded 614,770 active wallets, the lowest number since December 2018.
A declining active address ratio indicates reduced buying and selling activity among Bitcoin holders, suggesting a phase of market consolidation.
Juan Pellicer, a senior researcher at IntoTheBlock, attributes the decreasing wallet activity rate to weaker retail participation compared to previous cycles.
“This year’s run to a new all-time high was driven by institutional capital instead of retail investors,” Pellicer told Cointelegraph.
“The wider economic situation could have played a role in retail not making as many crypto investments as they’ve done in the past.”
The decline in activity rate coincides with investors preparing for increased whale movements, including the Mt. Gox trustee planning to start distributing payments to creditors in July.
Some larger holders, including those linked to governments, have also been observed participating in selling activities.
“Due to this concentration, much of the bearish trading activity is being performed off-chain, which doesn’t significantly impact on-chain address activity statistics,” Pellicer adds.
The drop in activity may seem counterintuitive considering the launch of Runes, a fungible token protocol introduced to the Bitcoin ecosystem alongside the latest halving event in April.
Runes was expected to offer an alternative revenue channel for miners, which it did initially as miners earned record-high trading fees on halving day.
However, transaction fees have since returned to pre-halving levels, and miner reserves, representing newly mined Bitcoin held by miners, are at 14-year lows.
Pellicer informed Cointelegraph that activity on Runes has cooled off, but due to the cyclical nature of such assets, their current state represents a temporary lull rather than a permanent decline.
Recently, attention in the crypto space has shifted to memecoins and celebrity tokens, attracting speculators aiming for larger gains.
Although Bitcoin is known for its volatility, it is currently considered stable compared to lower cap memecoins.
Sources:
https://cointelegraph.com/news/crypto-token-unlocks-july-2024
