Bitcoin looks busy but 31% of its users vanished as ETFs bleed $4.5B in 2026
Bitcoin’s community exercise has been weakening for six straight months, but the decline isn’t displaying up in the headline metric many merchants watch first.
The clearer sign isn’t transaction quantity, which has held up, but participation breadth. Fewer distinctive addresses are energetic on the chain, even as the community continues to course of an analogous quantity of transactions.
In a market the place worth discovery is more and more taking place by means of exchange-traded funds and derivatives, that break up issues. It suggests Bitcoin’s on-chain footprint is narrowing even whereas market publicity stays energetic elsewhere.
The pattern has grow to be more durable to disregard as the bear market has dragged on.
Glassnode data exhibits Bitcoin active addresses at about 778,680 on an eight-day common in mid-August 2025. As of Feb. 23, that determine had fallen to about 535,942, a drop of roughly 31%.
CryptoQuant has additionally flagged low community exercise for six consecutive months, describing the present stretch as an prolonged interval of weak point in on-chain participation.
The final time the market noticed an analogous sample was in 2024, when Bitcoin later posted a correction of about 30%.
That doesn’t robotically suggest the identical consequence now, but it reinforces the purpose that extended community softness has traditionally lined up with durations of weaker market conviction.
Breadth is falling, but throughput isn’t
Bitcoin’s transaction count has not fallen in step with the quantity of energetic addresses.
In mid-August 2025, transaction rely averaged about 444,000 per day. Data from Blockchain.com exhibits the typical has been about 439,000 per day over the newest 30 days.
However, every day prints have nonetheless been risky, starting from roughly 289,000 to 702,000, but the broader throughput pattern has not collapsed.
That divergence is central to the story.
If transaction quantity is holding regular whereas energetic addresses are falling, it means fewer entities are accountable for a similar quantity of on-chain exercise.
That can occur for a number of causes, and none of them require a surge in retail exercise. Exchanges and custodians can batch withdrawals.
Larger gamers can consolidate transfers. Institutional flows may be dealt with by means of fewer wallets. Operational exercise could cause bursts in transaction counts with out signaling a broader return of users.
The result’s a sequence that also looks busy at instances, but with thinner participation beneath.
This is why the decline in breadth is extra revealing than uncooked throughput. A flat transaction rely can masks a market the place exercise is more and more concentrated amongst repeat transactors, giant entities, and operational flows.
In that setup, Bitcoin’s chain stays useful and energetic, but much less consultant of broad consumer engagement.
Blockchain analytical agency Santiment has framed the backdrop in even starker phrases over an extended time horizon.
The agency mentioned that since February 2021, Bitcoin has seen 42% fewer distinctive addresses making transactions and 47% fewer new addresses created.
Santiment didn’t current that as proof that crypto is useless or {that a} multi-year bear market is locked in, but it did describe a bearish divergence that constructed by means of 2025, as market caps rose whereas Bitcoin’s utility metrics weakened.
That identical pressure is now displaying up in the six-month pattern. Price and market narratives can keep alive whereas the chain itself turns into quieter.
Low charges level to skinny demand for blockspace
Fees reinforce the concept Bitcoin is in a thin-demand regime on Layer 1.
Data from mempool.house exhibits that the blockchain network’s recent average transaction fees have been round $0.24, or about 1.8 sats/vB.
Those are low ranges for a community that, in prior cycle peaks, has seen sustained competitors for blockspace. At the present transaction tempo, that payment degree implies underneath $100,000 per day in transaction payment income for the community.
That stays small relative to the block subsidy, which remains to be about 450 BTC per day.
This isn’t an instantaneous safety downside, and it doesn’t imply Bitcoin’s security model is under near-term stress.
This is as a result of the block subsidy continues to dominate miner income, but it does underline a longer-term actuality that Bitcoin has not been pressured to confront in this part of the cycle.
The transition towards a extra fee-supported safety funds, a subject that returns each cycle, isn’t being examined in this surroundings as a result of payment demand is weak.
In sensible phrases, right now’s quiet payment market delays that debate.
The chain isn’t underneath strain from sustained congestion, and users will not be competing aggressively for inclusion. That can change shortly in a volatility occasion, a speculative wave, or a brand new demand shock, but it has not occurred but.
For now, blockspace looks underused relative to prior bull phases, which inserts the broader image of decreased participation breadth.
CryptoQuant’s framing, that low community exercise is usually linked to low curiosity in the asset and durations of broad losses, additionally suits this payment surroundings.
When curiosity falls, fewer new contributors arrive, fewer discretionary transfers occur, and payment strain fades.
Bitcoin can nonetheless commerce actively as a monetary asset, but the chain itself now not displays broad engagement.
Macro circumstances and ETF flows are altering how Bitcoin trades
The macro backdrop helps clarify why this pattern has continued.
Bitcoin is increasingly trading like a macro-sensitive, high-beta asset, particularly throughout risk-off durations.
Over the previous 12 months, US inflation has cooled, with CPI at 2.4% year over year in January 2026, and the Federal Reserve’s goal vary has been cited at 3.50% to three.75% in late January.
In a less complicated market, cooling inflation may need supported a cleaner danger rebound.
Instead, markets have centered on volatility catalysts, together with tariff-policy uncertainty, which has pushed charges and the greenback round and saved broader danger urge for food unstable.
In that sort of surroundings, each retail and institutional buyers usually cut back churn. Retail participation falls. Traders transfer much less usually. Institutions can keep engaged, but they’re extra prone to regulate publicity by means of merchandise that don’t require shifting cash on-chain.
That is the place spot Bitcoin ETFs grow to be central to the story.
Data from Coinperps present multi-week internet ETF outflows, together with about $3.8 billion over 5 weeks and about $4.5 billion in year-to-date outflows.
That shifts exercise away from self-custody wallets and towards brokerage accounts.
It additionally helps clarify why the market can stay energetic whereas the chain grows quieter. Exposure remains to be altering fingers, but extra of that change is being expressed off-chain.
That is a significant shift in Bitcoin’s position. It more and more looks like a monetary product with an institutional wrapper, whereas Layer 1 is used extra selectively for settlement, storage, and periodic transfers.
At the identical time, every day transactional vitality throughout crypto is concentrating in different areas, particularly stablecoins.
Coin Metrics has highlighted stablecoins as a core driver of on-chain activity, with a provide of practically $300 billion and rising transaction volumes.
If stablecoin rails on different chains are dealing with extra day-to-day settlement, Bitcoin’s Layer 1 naturally turns into narrower in operate.
That doesn’t, by itself, weaken Bitcoin’s funding thesis, but it does change its form.
Three eventualities for the subsequent three to 6 months
The present six-month decline in community breadth units up three believable paths for Bitcoin over the subsequent three to 6 months.
The first is a continuation of apathy, which looks like the bottom case in a risk-off tape.
In that situation, energetic addresses stay depressed, in a 450,000 to 600,000 vary, transaction counts keep uneven but don’t collapse, and costs stay low. ETF flows keep flat to destructive.
Here, Bitcoin can still move sharply on macro headlines, but on-chain participation doesn’t affirm a broad restoration. The asset trades like a macro instrument, not like a community getting into a recent growth part.
The second is a liquidity thaw, which is the extra constructive path.
If cooling inflation and easing expectations stabilize danger urge for food, ETF flows might shift from outflows to sustained inflows. In that surroundings, energetic tackle development would grow to be the important thing affirmation sign.
In this case, a rebound towards 650,000 to 800,000 energetic addresses would recommend that participation breadth is returning, not simply worth momentum. That would look extra like a traditional cycle restoration, with worth positive factors supported by rising on-chain consumer engagement.
The third is the structural displacement situation, which can be a very powerful to observe.
In that situation, Bitcoin rallies, but on-chain breadth stays muted. ETFs, derivatives, and custodial settlement proceed to dominate, whereas stablecoins soak up extra transactional demand elsewhere in crypto.
Here, Bitcoin continues to carry out more and more as a digital macro asset and settlement layer, somewhat than as a sequence with broad, day-to-day retail exercise. T
That situation would sign an evolution in Bitcoin’s position, reflecting the way it has modified from what it was years in the past.
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