Bitcoin's On-Chain Activity Sees Significant Decline Amid Institutional Shift

Bitcoin's on-chain activity has been under scrutiny in recent months, and the latest data suggests that it has seen a significant decline compared to its peak in May 2021.

The number of active addresses, which reflect how many unique participants are transacting on the network, has fallen by around 44% from its May 2021 high. New wallet creation, known as network growth, has also declined by approximately 43%, with nearly 489,000 new wallets created per day in May 2021 compared to about 278,000 today.

Analysts point to institutional investment vehicles and passive long-term holders as key factors behind this shift. The rise of spot Bitcoin ETFs and other institutional products has allowed investors to gain exposure to the cryptocurrency without moving coins on-chain or opening new wallets, which may contribute to the decline in on-chain activity.