Bitcoin breaking above $100k silently broke its positive adoption curve as usage craters
Bitcoin Is Being Bought, Not Used
For most of Bitcoin’s historical past, value and usage instructed broadly the identical story.
When value moved increased, extra individuals confirmed up. More wallets grew to become energetic. More transactions hit the chain. The relationship was by no means excellent, nevertheless it was secure sufficient to deal with value 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 appropriate. Since 2021, that’s now not the case for Bitcoin.
| Years of Growth | Internet Year (Total Users) | Bitcoin Year (Active Addresses SMA) | Observation |
|---|---|---|---|
| Year 1 | 1991: 4.3M | 2010: ~105 | BTC began from a a lot smaller base. |
| Year 5 | 1995: 39.2M | 2014: ~150k | BTC scaling quickly. |
| Year 10 | 2000: 361M | 2019: ~750k | BTC on-chain development begins to gradual. |
| Year 12 | 2002: 669M | 2021: ~1.0M | The Peak: BTC adoption stalls right here. |
| Year 17 | 2007: 1.3B | 2026: ~900k | The Stagnation: BTC exercise is down ~10% from 2021. |
Bitcoin is buying and selling at ranges that will have sounded implausible only a few years in the past, but fewer individuals are truly utilizing the community. On-chain exercise has not utterly vanished, nevertheless it has clearly did not maintain tempo with value.
The information factors to a market that’s being amassed aggressively, whereas the blockchain itself is seeing much less engagement than it did 4 years in the past.
This seems to be much less like a brief divergence and extra like a structural shift.
Price hit new highs, usage didn’t
Our first chart makes the issue apparent. The variety of energetic Bitcoin addresses has fallen to the bottom common degree since January 2020.
For context, miners acquired 12.5 BTC per block to confirm these transactions when usage was final this low. That’s $1.1 million per block by as we speak’s costs. Miners as we speak obtain a mean of simply $275,000.
Daily energetic addresses, sourced from CryptoQuant, peaked in the course of the 2021 bull market, reaching roughly 1.2 to 1.3 million addresses per day. That interval marked the high 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 did not make the next high. By early 2025, as value pushed to report ranges, on-chain exercise was already rolling over, sitting nearer to ranges final seen in the course of the 2022 bear market.
The implication is uncomfortable however exhausting to disregard. Bitcoin’s highest costs now happen with fewer energetic customers than 4 years in the past.
That alone challenges the belief that rising costs mechanically replicate rising adoption. Capital is clearly flowing into Bitcoin, however far fewer members are interacting with the community itself.
Moreover, the development from November 2024 to as we speak could also be much more regarding, as proven beneath.
ETFs modified Bitcoin’s market construction
To perceive why this divergence issues, it helps to step again and take a look at adoption extra holistically.
Rather than counting on a single metric, we constructed a composite adoption index utilizing solely on-chain fundamentals. The index combines day by day energetic addresses, whole transaction depend, and the ratio between realized value and spot value, with all inputs normalized and weighted towards usage fairly than valuation.
The objective was easy, isolate actual engagement with the Bitcoin community whereas filtering out price-driven noise.
When this adoption index is plotted in opposition to normalized spot value, a transparent divergence emerges in early 2024, shortly after the approval of US spot Bitcoin ETFs by the SEC.
Price continues to climb. Adoption stalls after which begins to development decrease.
This sample didn’t seem in prior cycles. In 2020 and 2021, value and adoption rose collectively. In 2022, each fell collectively. In the ETF period, value has moved forward whereas on-chain usage did not observe.
Since ETFs launched, value has risen sooner 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. Exposure 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 fingers whereas the community stays largely untouched.
Capital is deepening, exercise shouldn’t be
The relationship between spot value and realized value makes this shift even clearer.
Realized value displays the typical price foundation of all cash in circulation. It strikes slowly and tends to rise as long-term holders accumulate at increased costs. Spot value reacts way more shortly to marginal demand.
Since 2023, realized value has climbed steadily, exhibiting that capital coming into Bitcoin is more and more dedicated and long-term in nature. Over the identical interval, spot value has repeatedly overshot, significantly in the course of the ETF-driven rally.
The widening hole between spot value and realized value tells a particular story.
Capital is coming into at the next price foundation. Existing holders aren’t transacting extra continuously. Network velocity is declining.
Bitcoin is more and more functioning as collateral, a treasury asset, and a long-duration retailer of worth. Those roles are materially completely different from the transactional adoption narratives typically implied by rising costs.
This chart provides financial depth to the broader image. Bitcoin is being amassed, whereas circulation continues to gradual.
A regime shift, not a cycle
The closing chart places numbers behind what the sooner charts counsel.
By calculating a rolling 90-day correlation between the adoption index and spot value, it turns into doable to see how tightly value has tracked on-chain usage over time.
From 2020 by means of most of 2021, the correlation remained persistently positive. Price moved in line with adoption, reflecting natural community development. In 2022, the correlation turned sharply unfavourable as value collapsed sooner than usage, a typical capitulation section.
After ETFs entered the market, that relationship grew to become unstable.
Correlation now swings between positive and unfavourable, typically remaining beneath zero for prolonged durations. Price actions more and more fail to replicate modifications in on-chain engagement.
For the primary time in Bitcoin’s historical past, value appreciation is now 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 info reveals is a community shifting into a special section of its life cycle.
On-chain adoption seems to have peaked in 2021. The 2024–2025 rally was pushed primarily by value discovery away from the bottom layer. ETFs launched a structural decoupling between value and usage. Rising realized costs sign conviction amongst current holders fairly than an increasing consumer base.
Supporting information from UTXO age bands reinforces this image. Older cash account for a rising share of provide, whereas short-term UTXOs present weaker development. Exchange netflows additionally level towards accumulation fairly than distribution, and transaction counts have remained broadly flat since 2022, even as costs greater than doubled.
Bitcoin is coming into a extra capital-intensive, lower-velocity section.
That shift doesn’t invalidate the asset. It modifications how adoption needs to be measured and the way value needs to be interpreted.
Reading value as a proxy for usage now not works within the ETF period.
Bitcoin is being purchased, enthusiastically and at scale. It is solely 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.
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