Bitcoin, which topped $100,000, quietly broke its positive adoption curve as usage cratered

Bitcoin is being bought but not being used

For most of Bitcoin’s history, price and usage told much the same story.

As prices rose, more people flocked to them. More wallets are now active. More transactions affect the chain. This relationship was by no means perfect, but it was stable enough to treat price as a rough signal for adoption.

That relationship is now broken.

For years, we compared Bitcoin’s adoption to the growth of the Internet and cried, “It’s still too early.” The graph now slopes to the right. Starting in 2021, this is no longer the case for Bitcoin.

Bitcoin is trading at levels that seemed unbelievable just a few years ago, but fewer people are actually using the network. On-chain activity has not completely disappeared, but it is clear that it has not kept pace with price increases.

This data shows that while the market is actively accumulating, the involvement of blockchain itself is decreasing compared to four years ago.

This appears to be a structural change rather than a temporary deviation.

Prices hit new highs, but usage did not rise

The first graph reveals the problem. The number of active Bitcoin addresses has decreased to its lowest average level since January 2020.

For context, the last time usage was this low, miners received 12.5 BTC per block to validate these transactions. At current prices, that’s equivalent to $1.1 million per block. Today, the average amount miners receive is just $275,000.

Daily active addresses pulled from CryptoQuant peaked during the 2021 bull market, reaching approximately 1.2 million to 1.3 million addresses per day. This period marked a high water mark for on-chain participation.

Activity has never returned to that level since.

Bitcoin continued to reach new highs during the ETF era, but active addresses were unable to reach even higher prices. By early 2025, on-chain activity has already begun to reverse as prices reach record levels, approaching ranges last seen in the 2022 bear market.

This implication is unpleasant, but difficult to ignore. Bitcoin’s highest prices currently occur with fewer active users than four years ago.

That alone calls into question the assumption that higher prices automatically reflect increased penetration. While it is clear that capital is flowing into Bitcoin, there are far fewer participants operating the network itself.

Additionally, the trends from November 2024 to now may be even more concerning, as shown below.

ETFs have changed the Bitcoin market structure

To understand why this difference is important, it helps to take a step back and look at adoption more holistically.

Rather than relying on a single metric, we constructed a composite adoption index using only on-chain fundamentals. The index combines daily active addresses, total transactions, and the ratio of realized to spot prices, with all inputs normalized and weighted by usage rather than reputation.

The goal was straightforward: to remove price-driven noise while isolating the actual engagement with the Bitcoin network.

When this adoption index is plotted against the normalized spot price, a clear divergence appears in early 2024, shortly after the US Spot Bitcoin ETF was approved by the SEC.

Prices continue to rise. Adoption stagnates and then begins to trend downward.

This pattern did not appear in previous cycles. In 2020 and 2021, prices and adoption numbers increased simultaneously. Both will collapse in 2022. In the era of ETFs, prices moved forward, but on-chain usage couldn’t keep up.

Since the ETF’s launch, prices have risen faster than adoption, marking a break from Bitcoin’s historical run.

This disruption is important because ETFs change who buys Bitcoin and how they hold Bitcoin. Through custodians like Coinbase, you can now gain exposure without touching the blockchain at all. No wallet will be created. Transactions are not broadcast. No fees are paid to miners.

(Editor’s note: While OTC transfers by authorized participants are regularly registered on-chain, all ETF transactions are off-chain, and many OTC transactions also occur off-chain between Coinbase Prime account holders.)

Assets can change hands while the network remains largely unchanged.

Capital is deepening, but activity is not deepening

This change becomes even clearer when we look at the relationship between spot prices and realized prices.

The realized price reflects the average cost basis of all coins in circulation. It moves slowly and tends to rise as long-term holders accumulate at higher prices. Spot prices react much more quickly to marginal demand.

Since 2023, the realized price has steadily increased, indicating that the capital flowing into Bitcoin is increasingly committed and of a long-term nature. Over the same period, spot prices repeatedly overshot, especially during ETF-led rallies.

The widening gap between spot and realized prices tells a concrete story.

Capital is entering at higher costs. Existing holders are not trading more frequently. Network speed is slow.

Bitcoin is increasingly serving as collateral, a treasury asset, and a long-term store of value. These roles are very different from the transactional adoption narrative often implied by price increases.

This chart adds economic depth to the picture. Bitcoin continues to accumulate, but the amount in circulation continues to slow.

Not a cycle but a change of government

The final graph adds numbers behind those suggested by the previous graph.

By calculating a 90-day rolling correlation between the adoption index and the spot price, it is possible to see how closely the price tracks on-chain usage over time.

The correlation remained consistently positive throughout 2020 and most of 2021. Prices have also fluctuated with adoption to reflect organic network growth. In 2022, the correlation sharply turned negative as prices collapsed faster than usage. This is a typical surrender stage.

After ETFs entered the market, that relationship became unstable.

Currently, the correlation fluctuates between positive and negative and often remains below zero for long periods of time. Price movements are no longer able to reflect changes in on-chain engagement.

For the first time in Bitcoin’s history, rising prices are no longer reliably linked to increased on-chain adoption.

This change reflects a shift in the way Bitcoin is owned, accessed, and valued.

What this means for Bitcoin adoption

None of this suggests that Bitcoin is failing.

What the data shows is that networks are moving into different stages of their lifecycle.

On-chain adoption appears to have peaked in 2021. The rally in 2024-2025 was primarily driven by price discovery away from the base layer. ETFs introduced a structural decoupling between price and usage. The increase in realized prices indicates the conviction of existing holders rather than an expansion of the user base.

Corroborating data from the UTXO age group strengthens this picture. Short-term UTXO growth is slowing while older coins make up an increasing proportion of the supply. The exchange’s net flow also shows a trend of accumulation rather than distribution, with the number of transactions remaining almost flat from 2022 onwards, even though the price has more than doubled.

Bitcoin is entering a more capital-intensive and slower phase.

This change does not invalidate the asset. It changes how adoption is measured and how prices are interpreted.

In the age of ETFs, reading price as a proxy for usage no longer works.

Bitcoin is being bought enthusiastically and massively. It’s just less used than it used to be.

Blockchain has been marking that shift for some time. It’s hard to ignore the chart.