Bitcoin network activity is showing a sharp decline, reaching levels not seen in over a year. Following peak levels of 700,000 transactions per day, the 7-day moving average has dropped to 316,000.
From Overcrowded to Underused
Just months ago, Bitcoin was filled with activity thanks to protocols like Runes and Ordinals, which allowed the creation of tokens and the inscription of data onto individual sats. However, interest in these experiments has waned, and traders are moving to chains like Ethereum and Solana, where the technologies are more mature.
Low Fees Signal Return to Old-School Bitcoin
Another sign of the slowdown is the decrease in average Bitcoin transaction fees. Since January, they have remained below $1.50, indicating that demand for block space has decreased.
Future of Bitcoin Network and Possible Influencing Factors
Unless new catalysts occur, such as a surge in Layer-2 adoption or major updates like Taproot Assets, Bitcoin’s network activity may remain muted. This is not necessarily bad, as lower congestion means cheaper and faster transactions.
Since the emergence of Runes and Ordinals, network activity in Bitcoin has decreased significantly. While this indicates a return to more traditional uses of Bitcoin, it raises questions about its potential to stretch beyond its original functions.
