The slowdown in retail adoption of Bitcoin and Ethereum is accompanied by decreased network activity, sparking discussions about a potential market correction in the second quarter.
Slowdown in Cryptocurrency Adoption
The number of unique Bitcoin wallets and active addresses, particularly those with balances over $1, has significantly slowed. This matches the adoption curve model, indicating institutional accumulation leading to consolidation into fewer high-value wallets.
Market Structure Shifts
Large entities like MicroStrategy have concentrated their holdings, reducing the need for wide distribution of wallets. Ethereum mirrors this trend, recording its lowest adoption rate in 2025. Institutional wallets increasingly influence liquidity cycles, as seen with Bitcoin’s drop to $77k due to BTC ETF outflows.
Market Volatility and Predictions
On February 25, BTC ETFs recorded a net outflow of $1.4 billion, triggering a 5.11% price drop within 24 hours. Ethereum faces similar struggles in attracting new inflows. These outflows coincide with US economic policies, adding macroeconomic volatility. The lack of a Q1 rally raises questions about a potential bearish cycle in the second quarter.
Key structural changes and growing institutional influence create uncertainty regarding Bitcoin and Ethereum's retail adoption prospects. The coming period will reveal if cryptocurrencies can overcome current challenges and solidify their market position.
