Bitcoin Network Sees Lowest New Addresses Created Since 2018

Bitcoin (BTC) network activity in creating new addresses has dropped significantly, reaching its lowest level since July 2018.

Despite this, Bitcoin is trading at around $67,000 after rising more than 7% in the past week.

Decreased Bitcoin network activity

Data from market intelligence platform IntoTheBlock reveals a 7-day average of just 276,000 new Bitcoin addresses. The lower numbers show a significant decline in the number of new investors entering the cryptocurrency space, a sharp decline from 625,000 six months ago.

Someone has to address the bear in the room🐻

New number $ Bitcoin Headlines are at their lowest levels in several years. The 7-day average fell to 276K last week, a level not seen since July 2018.

Is this because ETFs act as a proxy for new users? Do people move… pic.twitter.com/1v9JeauxQG

— IntoTheBlock (@intotheblock) May 17, 2024

The “New Addresses” indicator tracks the daily creation of new wallets on the BTC network. High metrics usually indicate an influx of new investors. However, returning investors and owners who create multiple privacy wallets also contribute to this number. Despite this, the large number of new addresses generally indicates a long-term bullish sentiment for Bitcoin.

In addition to the decline in new addresses, other relevant indicators showed a downward trend. Miner revenues, measured by computational power, have reached a new historic low. Transaction fees and cross-chain transaction volume also decreased, indicating a general decline in Bitcoin network activity.

Typically, increased network activity indicates higher demand and stable prices. However, the current decline suggests that investors may be shifting towards derivatives speculation rather than organic use.

Spot ETFs transfer interest from cross-chain transactions

The recent approval of spot exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) has provided investors with a traditional investment route into BTC. This likely shifted attention away from cross-chain transactions and contributed to the decline in new addresses.

As a result of these changes and higher transaction fees following the excitement surrounding the runes, the seven-day moving average fell below 700,000 for the first time since March 2020. Meanwhile, although fees stabilized, they fell from an average of $31.4 on April 23 to $2.97. USD on May 18, the number of active addresses is still low.

The decline in network activity, evidenced by a multi-year low in the number of 30-day active addresses, indicates a decline in demand for Bitcoin transactions. This metric, which tracks different addresses involved in transactions over a 30-day period, fell to 12.64 million, a level last seen in February 2019.

A broader slowdown in the cryptocurrency market may also have contributed to this decline. according to Queen GekkoToday, the global cryptocurrency market cap is $2.53 trillion, down 0.7% over the past 24 hours. Most altcoins, such as Ethereum (ETH), BNB, XRP, and Toncoin (TON), have been trading in the red over the past day.