Bitcoin Is Being Purchased, Not Used
For many of Bitcoin’s historical past, worth and utilization informed broadly the identical story.
When worth moved increased, extra individuals confirmed up. Extra wallets turned energetic. Extra transactions hit the chain. The connection was by no means excellent, but it surely was steady sufficient to deal with worth as a tough sign for adoption.
That relationship has now damaged.
For years, we in contrast Bitcoin adoption to the expansion of the web, screaming, “We’re nonetheless early.” The graph went up and to the correct. Since 2021, that’s not the case for Bitcoin.
| Years of Development | Web Yr (Whole Customers) | Bitcoin Yr (Lively Addresses SMA) | Commentary |
|---|---|---|---|
| Yr 1 | 1991: 4.3M | 2010: ~105 | BTC began from a a lot smaller base. |
| Yr 5 | 1995: 39.2M | 2014: ~150k | BTC scaling quickly. |
| Yr 10 | 2000: 361M | 2019: ~750k | BTC on-chain development begins to sluggish. |
| Yr 12 | 2002: 669M | 2021: ~1.0M | The Peak: BTC adoption stalls right here. |
| Yr 17 | 2007: 1.3B | 2026: ~900k | The Stagnation: BTC exercise is down ~10% from 2021. |
Bitcoin is buying and selling at ranges that might have sounded implausible just some years in the past, but fewer individuals are really utilizing the community. On-chain exercise has not utterly vanished, but it surely has clearly didn’t preserve tempo with worth.
The information factors to a market that’s being gathered aggressively, whereas the blockchain itself is seeing much less engagement than it did 4 years in the past.
This seems much less like a short lived divergence and extra like a structural shift.
Value hit new highs, utilization didn’t
Our first chart makes the issue apparent. The variety of energetic Bitcoin addresses has fallen to the bottom common stage since January 2020.
For context, miners obtained 12.5 BTC per block to confirm these transactions when utilization was final this low. That is $1.1 million per block by at this time’s costs. Miners at this time obtain a mean of simply $275,000.
Day by day energetic addresses, sourced from CryptoQuant, peaked through the 2021 bull market, reaching roughly 1.2 to 1.3 million addresses per day. That interval marked the excessive watermark for on-chain participation.
Since then, exercise has by no means returned to these ranges.
Bitcoin went on to set new all-time highs within the ETF period, but energetic addresses didn’t make the next excessive. By early 2025, as worth pushed to file ranges, on-chain exercise was already rolling over, sitting nearer to ranges final seen through the 2022 bear market.
The implication is uncomfortable however laborious to disregard. Bitcoin’s highest costs now happen with fewer energetic customers than 4 years in the past.
That alone challenges the idea that rising costs mechanically mirror rising adoption. Capital is clearly flowing into Bitcoin, however far fewer contributors are interacting with the community itself.
Furthermore, the development from November 2024 to at this time could also be much more regarding, as proven under.
ETFs modified Bitcoin’s market construction
To know why this divergence issues, it helps to step again and take a look at adoption extra holistically.
Quite than counting on a single metric, we constructed a composite adoption index utilizing solely on-chain fundamentals. The index combines each day energetic addresses, whole transaction rely, and the ratio between realized worth and spot worth, with all inputs normalized and weighted towards utilization reasonably than valuation.
The aim was simple, isolate actual engagement with the Bitcoin community whereas filtering out price-driven noise.
When this adoption index is plotted towards normalized spot worth, a transparent divergence emerges in early 2024, shortly after the approval of US spot Bitcoin ETFs by the SEC.
Value continues to climb. Adoption stalls after which begins to development decrease.
This sample didn’t seem in prior cycles. In 2020 and 2021, worth and adoption rose collectively. In 2022, each fell collectively. Within the ETF period, worth has moved forward whereas on-chain utilization didn’t comply with.
Since ETFs launched, worth has risen quicker than adoption, marking a break from how Bitcoin has traditionally behaved.
That break issues as a result of ETFs change who’s shopping for Bitcoin and the way they maintain it. Publicity can now be gained with out touching the blockchain in any respect by means of custodians like Coinbase. No wallets are created. No transactions are broadcast. No charges are paid to miners.
[Editor’s Note: OTC transfers by Authorized Participants are regularly registered on-chain, but ETF trades are all off-chain, and many OTC trades also take place off-chain between Coinbase Prime account holders.]
The asset can change palms whereas the community stays largely untouched.
Capital is deepening, exercise isn’t
The connection between spot worth and realized worth makes this shift even clearer.
Realized worth displays the common price foundation of all cash in circulation. It strikes slowly and tends to rise as long-term holders accumulate at increased costs. Spot worth reacts much more rapidly to marginal demand.
Since 2023, realized worth has climbed steadily, displaying that capital coming into Bitcoin is more and more dedicated and long-term in nature. Over the identical interval, spot worth has repeatedly overshot, notably through the ETF-driven rally.
The widening hole between spot worth and realized worth tells a particular story.
Capital is coming into at the next price foundation. Present holders are usually not transacting extra continuously. Community velocity is declining.
Bitcoin is more and more functioning as collateral, a treasury asset, and a long-duration retailer of worth. These roles are materially completely different from the transactional adoption narratives usually implied by rising costs.
This chart provides financial depth to the broader image. Bitcoin is being gathered, whereas circulation continues to sluggish.
A regime shift, not a cycle
The ultimate chart places numbers behind what the sooner charts recommend.
By calculating a rolling 90-day correlation between the adoption index and spot worth, it turns into potential to see how tightly worth has tracked on-chain utilization over time.
From 2020 by means of most of 2021, the correlation remained persistently optimistic. Value moved consistent with adoption, reflecting natural community development. In 2022, the correlation turned sharply damaging as worth collapsed quicker than utilization, a typical capitulation part.
After ETFs entered the market, that relationship turned unstable.
Correlation now swings between optimistic and damaging, usually remaining under zero for prolonged durations. Value actions more and more fail to mirror modifications in on-chain engagement.
For the primary time in Bitcoin’s historical past, worth appreciation is not reliably related to rising on-chain adoption.
That change displays a shift in how Bitcoin is owned, accessed, and valued.
What this implies for Bitcoin adoption
None of this implies Bitcoin is failing.
What the information reveals is a community shifting into a distinct part of its life cycle.
On-chain adoption seems to have peaked in 2021. The 2024–2025 rally was pushed primarily by worth discovery away from the bottom layer. ETFs launched a structural decoupling between worth and utilization. Rising realized costs sign conviction amongst present holders reasonably than an increasing person base.
Supporting knowledge from UTXO age bands reinforces this image. Older cash account for a rising share of provide, whereas short-term UTXOs present weaker development. Change netflows additionally level towards accumulation reasonably than distribution, and transaction counts have remained broadly flat since 2022, at the same time as costs greater than doubled.
Bitcoin is coming into a extra capital-intensive, lower-velocity part.
That shift doesn’t invalidate the asset. It modifications how adoption ought to be measured and the way worth ought to be interpreted.
Studying worth as a proxy for utilization not works within the ETF period.
Bitcoin is being purchased, enthusiastically and at scale. It’s merely getting used lower than it as soon as was.
The blockchain has been signalling that change for a while. The charts make it tough to disregard.