- The market intelligence platform IntoTheBlock has recently shed light on Bitcoin’s sluggish adoption rate, which has left many analysts confused.
- The metrics reveal a concerning trend, despite significant trading activity and institutional interest.
- “Institutional whales are present, and activity on the Bitcoin network is high,” says an analyst from IntoTheBlock.
Explore the current state of Bitcoin adoption and market activity, as recent trends show slowing growth despite high transaction records.
Bitcoin Adoption Slows to a Low Not Seen in Years
Bitcoin experienced an exceptional first quarter in 2024, driven by interest from spot exchange-traded funds (ETFs) and various institutional investors. This demand allowed Bitcoin to exceed its previous all-time high (ATH) set in the last bull market. Historically, ATHs aligned closely with Halving events, but this time the record was surpassed beforehand.
Despite initial optimism, Bitcoin’s price movement has been relatively stagnant since reaching this new ATH. The cryptocurrency has been consolidating sideways, raising questions about its future direction.
Recent data from IntoTheBlock on the social platform X shows high transfer activity on the Bitcoin network, with the Number of Transactions metric reaching unprecedented levels. This increase in transactions has been largely influenced by the Runes protocol, which simplifies the process of minting fungible tokens on the Bitcoin blockchain.
“Institutional whales are present, and activity on the Bitcoin network is high,” notes the analytics firm. However, there lies a hidden issue in this apparent success.
One crucial metric that provides insight into Bitcoin’s adoption rate is the New Addresses indicator, which tracks the number of new addresses generated on the network daily. This indicator offers a snapshot of how widely the cryptocurrency is being adopted.
The chart below depicts the changing values of this Bitcoin metric over the last decade, showing a recent downward trend.
The data indicates that despite the high levels of network utilization and increased whale activity, the influx of new participants has significantly declined, hitting multi-year lows. This downturn in new Bitcoin users is more severe than the lows seen during the 2018 bear market.
The number of new Bitcoin users has plummeted to a multi-year low, even lower than levels observed in the 2018 bear market.
BTC Price
As of this writing, Bitcoin is trading at approximately $65,000, marking a 7% decrease over the last week.
Conclusion
In summary, Bitcoin’s recent performance shows a complex scenario where network activity is high, driven by institutional interest and the Runes protocol. However, the slowdown in the adoption rate, evidenced by the declining number of new addresses, presents a puzzling contradiction. The diminutive number of new users could be one of the reasons the cryptocurrency has not sustained its bullish momentum despite its new ATH. Observers will be keenly watching to see if this trend reverses in the near future.
