Bitcoin Active Addresses Slide As ETF Era Rewires Market Participation — Here’s Why

Bitcoin’s on-chain exercise has proven a pointy slowdown since spot Bitcoin exchange-traded funds (ETFs) launched. While institutional inflows into these merchandise have accelerated, the variety of energetic BTC addresses has declined. As Wall Street embraces BTC publicity, the community’s grassroots participation seems to be present process a major transformation.

In an X post, the CEO of SwanDesk, monetary analyst Jacob King, identified that Bitcoin energetic addresses have been in a gradual decline because the US spot BTC ETFs launched in January 2024, and the irony is apparent.

Why Retail Participation Shows Signs Of Fatigue

 For years, BTC maximalists have pushed for Wall Street adoption, believing institutional involvement would unlock the subsequent wave of mass utilization. Instead, on-chain participation has dropped sharply as retail misplaced curiosity.

King famous that these Bitcoiners have piled into the ETF for a fast, early FOMO bump, after which bailed, abandoning a market the place the asset is more and more traded by proxy. According to King, ETF investing kills BTC’s core ideas. While investors now not maintain or management their very own belongings as banks do, which is the very system BTC was designed to problem, greed at all times beats ideology.

Market watcher Crypto Seth has revealed that the online inflows into BlackRock and Fidelity’s spot BTC ETFs have been comparatively subdued since October 10, when the most important liquidation occasions occurred. Seth believes that this may flip right into a momentum reversal quickly, because the US inventory market is at 1% beneath new highs regardless of retail sentiment remaining caught in excessive worry.

Seth additionally identified that the macro backdrop is shifting in BTC’s favor. This is as a result of the Federal Reserve ended its Quantitative Tightening (QT) program on December 1, 2025, wrapping up a multi-year effort that shaved almost $3 trillion from the steadiness sheet since 2022. 

Since the US Fed fee continues to be at 4.00%, extra rate of interest cuts are on the horizon, which is higher than each Europe and China. The BlackRock iShares BTC Trust (IBIT), which was launched in January 2024, is presently the agency’s most worthwhile exchange-traded fund (ETF) primarily based on annual charge income, regardless of being lower than two years outdated.

Unlocking Bitcoin Without Compromising Its Core Principles

Bitcoin is seeing key initiatives that enhance its ecosystem. Every market cycle that has promise to unlock Bitcoin for decentralized finance (DeFi), RioSwap is among the few merchandise constructed on infrastructure that was able to unlocking it in a really decentralized method. 

According to Mintlayer, this was powered by Mintlayer’s native HTLC structure, as RioSwap introduces a Decentralized Exchange (DEX) that permits BTC to maneuver straight into decentralized markets with out wrapping, unbridging, and is totally within the consumer’s management. With the RioSwap testnet now reside, Mintlayer sees this as the beginning of a brand new liquidity section for BTC the place the asset will develop into an energetic participant within the decentralized market by itself phrases.