BIS Study Shows Bitcoin On‑chain Transfer Estimates Can Vary Sixfold

A recent Bank for International Settlements (BIS) working paper reveals that estimates of Bitcoin’s on‑chain transfer value can diverge dramatically based on the methodology used to handle transaction outputs. By applying three different calculation approaches to Bitcoin’s UTXO model, the researchers observed gaps of up to sixfold in monthly transfer‑value estimates.

How Bitcoin Transfer Values Are Measured

The study examined Bitcoin data from 2009 to 2026, covering roughly 1.3 billion transactions and 3.6 billion outputs. Researchers tested three methods:

• Upper estimate: counts the value of all transaction outputs.
• Adjusted estimate: removes outputs that return to the sending address, treating them as likely change.
• Conservative lower estimate: excludes identified self‑transfers or, when none are found, subtracts the largest output under the assumption that smaller outputs represent the economic transfer.

These differing treatments produced monthly transfer‑value figures that diverged by as much as six times, especially during periods of heightened Bitcoin activity and price spikes.

Implications for Bitcoin Valuation

The paper also compares conventional market capitalization—applying the current price to the entire Bitcoin supply—with alternative measures that account for dormant coins or the price at which each output last moved (realized capitalization). Conventional market cap has been observed to reach up to four times realized capitalization during rapid price appreciation, while realized capitalization briefly exceeded conventional market cap during Bitcoin’s sharp 2022 decline.

Measurement Challenges Beyond Bitcoin

Ethereum presented a distinct issue: a single transaction can interact with multiple smart contracts, generating data across inputs, execution traces, and event logs. The researchers classified about 13 million of the 67.5 million active Ethereum contracts, leaving more than 54 million unclassified. Among the classified contracts, roughly 12 million were proxies, 1.4 million were fungible‑token contracts, and about 100 000 were NFT contracts.

Stablecoin data also faced gaps. On Ethereum, USDT holdings in smart contracts rose above 20 % in 2022 and later settled between 10 % and 15 %. By contrast, Tron’s smart‑contract USDT holdings hovered around 1 % for most of the study period. Visa’s on‑chain analytics filter further adjusts stablecoin volume by removing high‑frequency trading, bots, bridge routing, and exchange activity, resulting in a markedly lower adjusted volume figure.

Recommendations for Future Measurement

The authors suggest reporting ranges rather than single‑point estimates, explicitly stating technical assumptions, and separating an asset’s identity from the underlying blockchain infrastructure. They caution that on‑chain indicators are “noisy approximations rather than direct measures of economic activity.”