Bitcoin Activity is at its Lowest. As celebrity memecoins pull speculators away from more established cryptocurrencies, the absence of retail engagement is suspected to be responsible for the decline in Bitcoin wallet activity related to the cryptocurrency. According to on-chain data provided by IntoTheBlock, the ratio of active Bitcoin addresses has reached its lowest level since November 2010, representing a significant decrease.
In June, the weekly active wallet ratio reached its highest point of 1.32% after falling to a low of 1.22%. Until November 2010, the greatest ratio for the month has not been seen since then. Furthermore, the total number of active wallets has reached levels that have not been seen in multiple years. The number of active wallets reached its lowest point since December 2018, with 614,770 recorded during May 27.
The percentage of active addresses is decreasing, which shows that Bitcoin (BTC) holders are not engaging in any buying and selling activity. This suggests that the market is entering a phase of consolidation. One of the senior researchers of IntoTheBlock, Juan Pellicer, believes that the declining wallet activity rate of Bitcoin can be attributed to a lower level of retail participation than in previous cycles. The run to a new all-time high that occurred this year was driven by institutional money rather than retail investors, according to what Pellicer said in an interview.
Economic Crisis Affects Investors
The broader economic crisis may have contributed to the fact that retail investors have not made as many investments in cryptocurrencies as they did in the past. As investors prepare for growing whale movements, including the trustee of Mt. Gox, expecting to begin distributing payments to creditors in July, the activity rate has decreased. This comes at a time when investors are gearing up for this period. Additionally, it was observed that several larger holders, particularly those connected to governments, were engaged in actions related to selling.
Pellicer continues, “Because of this concentration, a significant portion of the bearish trading activity is being carried out off-chain, which does not significantly impact the overall statistics regarding chain address activity.”
Are Runes Struggling?
The decline in activity may appear counterintuitive, given the debut of Runes, a fungible token mechanism introduced to the Bitcoin ecosystem in conjunction with the most recent halving event in April. It was anticipated that Runes would offer miners another revenue channel, which it accomplished on the very first day of its existence. Miners could pocket record-high trading fees on the day the exchange was halved.
Bitcoin Activity is at its Lowest: Transaction fees, on the other hand, have returned to their pre-halving levels. This is because miner reserves, the reserves of new Bitcoin held by miners, are also at their lowest point in 14 years. As a result of the cyclical nature of such assets, the current situation of Runes indicates a temporary pause rather than a permanent collapse, according to Pellicer, who said that activity on Runes has slowed down.
Recently, attention has been paid to cryptocurrency, specifically memecoins and celebrity tokens. These cryptocurrencies are attracting speculators who are betting on increased profit opportunities. Bitcoin’s current status can be deemed stable compared to memecoins with lower market capitalization, although Bitcoin is commonly recognized for its volatility.
