Bitcoin Network Activity Drops 44% From 2021 Peak

TLDR:

• Bitcoin active addresses fell 44%, dropping from 1.12M daily in May 2021 to roughly 624K today.
• New wallet creation declined 43%, from nearly 489K per day to approximately 278K in this cycle.
• Spot Bitcoin ETFs allow institutional investors to gain exposure without creating on-chain wallets.
• Strategy sold 32 BTC worth $2.5M, its first Bitcoin sale in 3.5 years, briefly pushing BTC below $72K.

Bitcoin’s on-chain activity has declined notably compared to the peak of the 2021 bull market. Active addresses and new wallet creation have both fallen by roughly 43–44% from their May 2021 highs.

Meanwhile, Bitcoin’s price remains well above 2021 levels for much of the current cycle. Analysts point to institutional investment vehicles and passive long-term holders as key factors behind this shift in network behavior.

On-Chain Participation Drops Despite Higher Prices

According to Santiment Intelligence, Bitcoin averaged around 1.12 million active addresses per day in May 2021. That figure has since dropped to approximately 624,000 active addresses daily. New wallet creation has followed a similar path, falling from nearly 489,000 per day to about 278,000.

These two metrics are closely watched by analysts tracking network health. Active addresses reflect how many unique participants are transacting on the network.

New wallet creation, known as network growth, tracks addresses interacting with Bitcoin for the very first time.

The decline stands out because Bitcoin’s price has largely held above 2021 peaks. Normally, higher prices tend to draw more retail participants onto the network. This cycle, however, the expected surge in new users has not materialized on-chain.

One explanation is the rise of spot Bitcoin ETFs and other institutional products. These vehicles allow investors to gain Bitcoin exposure without moving coins on-chain or opening new wallets. As a result, price action no longer directly translates into on-chain activity growth.

Strategy’s Bitcoin Sale Adds Short-Term Pressure

Santiment noted that prolonged sideways price movement is also a factor. Historically, volatility — in either direction — tends to spark a rise in on-chain activity.

With markets moving sideways and investor attention shifting toward equities and precious metals, Bitcoin activity has stayed subdued.

Adding to short-term pressure, Michael Saylor’s Strategy recently disclosed its first Bitcoin sale in approximately 3.5 years. The firm sold 32 BTC worth around $2.5 million, which briefly pushed Bitcoin below $72,000, according to Bull Theory.

The sale drew attention given Strategy’s history as one of Bitcoin’s largest corporate holders. The firm still holds 843,706 BTC, representing roughly 4% of Bitcoin’s entire supply, purchased for approximately $63.86 billion.

Saylor had previously stated that Strategy could sell Bitcoin to fund dividends, but added it would buy 20 BTC for every one it sells.

For context, Strategy sold 704 BTC in December 2022 for tax-loss purposes, then bought back 810 BTC just two days later. The latest sale appears minor relative to the company’s total holdings and long-term accumulation strategy.

The post Bitcoin Network Activity Drops 44% From 2021 Peak appeared first on Blockonomi.