Bitcoin activity drops to lowest level since 2010

The ratio of active Bitcoin addresses has plummeted to its lowest level since November 2010, according to onchain data from IntoTheBlock.

In June, the weekly active wallet ratio dropped to a low of 1.22% while peaking at 1.32%. The month’s highest ratio was last seen in November 2010.

Additionally, the total number of active wallets has reached multiyear lows. The week of May 27 recorded 614,770 active wallets, the lowest figure since December 2018.

A declining active address ratio indicates a lack of buying and selling activity among Bitcoin holders, suggesting a phase of market consolidation.

Juan Pellicer, a senior researcher at IntoTheBlock, attributes Bitcoin’s decreasing wallet activity rate to weaker retail participation than in past cycles.

“This year’s run to a new all-time high was driven by institutional capital instead of retail investors,” Pellicer told Cointelegraph.

“The wider economic situation could have played a role in retail not making as many crypto investments as they’ve done in the past.”

The drop in activity rate comes as investors brace for a period of rising whale movements, including the Mt. Gox trustee planning to start distributing payments to creditors in July.

Some larger holders, including those linked to governments, were also spotted partaking in selling activities.

“Due to this concentration, much of the bearish trading activity is being performed offchain, which doesn’t significantly impact onchain address activity statistics,” Pellicer adds.

Are Runes struggling?

The drop in activity could appear counterintuitive to the launch of Runes, a fungible token protocol introduced to the Bitcoin ecosystem in tandem with the latest halving event in April.

Runes was expected to provide an alternative revenue channel for miners, which it did on the first day as miners pocketed record-high trading fees on the halving day.

But transaction fees have since normalized to pre-halving levels as miner reserves, which represent the new Bitcoin held by miners, are also at 14-year lows.

Pellicer told Cointelegraph that activity on Runes has cooled off, though due to the cyclical nature of such assets, their current state represents a temporary lull rather than a permanent decline.

Meanwhile, recent attention to crypto has been focused on memecoins and celebrity tokens, which are attracting speculators who are gambling on larger gains.

Though Bitcoin is widely known for its volatility, its current state can be considered stable when compared to lower cap memecoins.

Source: https://cointelegraph.com/news/bitcoin-activity-lowest-level-since-2010