The active Bitcoin address ratio has dropped to the lowest level since November 2010, as per on-chain data from IntoTheBlock. In June, the percentage of active wallets fell to a low of 1.22% after reaching a peak of 1.32%. The highest ratio for the month was last observed in November 2010. Moreover, the total number of active wallets has hit multi-year lows, with the week of May 27 registering 614,770 active wallets, the lowest count since December 2018. This decline in active address ratio indicates reduced buying and selling activity among Bitcoin (BTC) holders, signaling a period of market consolidation.
Juan Pellicer, a senior researcher at IntoTheBlock, attributes the decrease in Bitcoin’s wallet activity rate to weaker retail participation compared to previous cycles. He states that this year’s surge to a new all-time high was primarily fueled by institutional capital rather than retail investors. Pellicer suggests that the broader economic situation may have deterred retail investors from making as many crypto investments as they have in the past.
Investors are preparing for increased whale movements, including the Mt. Gox trustee planning to initiate distributions to creditors in July. Some major holders, including government-linked entities, have been observed engaging in selling activities. Pellicer notes that due to this concentration, a significant portion of bearish trading activity is conducted off-chain, which does not considerably impact on-chain address activity statistics.
Despite the introduction of Runes, a fungible token protocol in the Bitcoin ecosystem alongside the latest halving event in April, with the expectation of providing an additional revenue stream for miners, transaction fees have normalized to pre-halving levels. Miner reserves, representing the new Bitcoin held by miners, are at 14-year lows. Pellicer mentions that Runes’ activity has cooled off, but given the cyclicality of such assets, their current state is seen as a temporary lull rather than a lasting decline.
While recent crypto attention has centered on memecoins and celebrity tokens that attract speculators seeking significant gains, Bitcoin’s volatility is comparatively stable when contrasted with lower market cap memecoins. The question arises whether Runes truly represent an enhancement for Bitcoin, with 68% of Runes currently in decline, leading to speculation on their effectiveness as an upgrade for Bitcoin.