Bitcoin surpassing $100k has quietly disrupted its positive adoption trend as usage declines.

Bitcoin Is Being Purchased, Not Utilized

Throughout most of Bitcoin’s existence, price and usage shared a similar narrative.

As prices increased, more individuals participated. A greater number of wallets became operational. Transaction volumes surged on the blockchain. While the correlation was never flawless, it was sufficiently reliable to consider price as a general indicator of adoption.

This correlation has now unraveled.

For several years, Bitcoin adoption was likened to the expansion of the internet, proclaiming, “We’re still in the early stages.” The graph exhibited an upward trend. Since 2021, this has ceased to be true for Bitcoin.

Bitcoin adoption versus the internet using active addresses as a proxy for users

Years of Growth	Internet Year (Total Users)	Bitcoin Year (Active Addresses SMA)	Observation
Year 1	1991: 4.3M	2010: ~105	BTC began from a much smaller foundation.
Year 5	1995: 39.2M	2014: ~150k	BTC scaling quickly.
Year 10	2000: 361M	2019: ~750k	BTC on-chain expansion starts to decelerate.
Year 12	2002: 669M	2021: ~1.0M	The Peak: BTC adoption hits a standstill here.
Year 17	2007: 1.3B	2026: ~900k	The Stagnation: BTC activity has decreased by ~10% since 2021.

Bitcoin is trading at levels that would have seemed unbelievable just a few years prior, yet a diminishing number of individuals are actively utilizing the network. On-chain activity has not entirely disappeared, but it has evidently failed to keep up with price movements.

The data suggests a market that is being aggressively accumulated, while the blockchain itself is experiencing less interaction than it did four years ago.

This appears less like a temporary discrepancy and more like a fundamental transformation.

Price reached new heights, usage did not

Our first chart clearly illustrates the issue. The count of active Bitcoin addresses has dropped to the lowest average level since January 2020.

To provide context, miners earned 12.5 BTC per block to confirm these transactions when usage was last at such a low. That amounts to $1.1 million per block at today’s prices. Currently, miners receive an average of just $275,000.

Bitcoin’s price has achieved new all-time highs in the ETF era, even as daily active addresses remain significantly below their peak in 2021, underscoring a widening gap between valuation and on-chain usage.

Daily active addresses, sourced from CryptoQuant, peaked during the 2021 bull market, reaching approximately 1.2 to 1.3 million addresses per day. That period marked the pinnacle of on-chain engagement.

Since then, activity has not returned to those heights.

Bitcoin went on to set new all-time records in the ETF era, yet active addresses failed to achieve a higher peak. By early 2025, as prices reached unprecedented levels, on-chain activity was already declining, aligning more closely with ranges last observed during the 2022 bear market.

The implication is unsettling but difficult to overlook. Bitcoin’s highest valuations now coincide with fewer active users than four years ago.

This alone challenges the notion that rising prices inherently indicate increasing adoption. Capital is evidently flowing into Bitcoin, but significantly fewer participants are engaging with the network itself.

Furthermore, the trend from November 2024 to the present may be even more alarming, as illustrated below.

The total number of unique Bitcoin active addresses, inclusive of senders and receivers since the end of 2024 (Source: CryptoQuant)

ETFs altered Bitcoin’s market dynamics

To comprehend why this divergence is significant, it is beneficial to take a step back and examine adoption in a broader context.

Instead of depending on a singular metric, we developed a composite adoption index using only on-chain fundamentals. This index amalgamates daily active addresses, total transaction counts, and the ratio of realized price to spot price, with all components normalized and weighted toward usage rather than valuation.

The objective was clear: to isolate genuine engagement with the Bitcoin network while filtering out price-induced noise.

When this adoption index is plotted against normalized spot price, a distinct divergence appears in early 2024, shortly following the SEC’s approval of US spot Bitcoin ETFs.

A composite adoption index derived from on-chain metrics diverges from price after the launch of ETFs, indicating that recent price increases are no longer accompanied by a rise in network usage.

Price continues to ascend. Adoption stagnates and then starts to decline.

This trend did not occur in previous cycles. In 2020 and 2021, price and adoption rose concurrently. In 2022, both declined together. In the ETF era, price has surged ahead while on-chain engagement lagged.

Since the onset of ETFs, price has escalated faster than adoption, highlighting a departure from Bitcoin’s historical behavior.

This change is significant because ETFs transform who is acquiring Bitcoin and how it is held. Exposure can now be attained without interacting with the blockchain at all through custodians like Coinbase. No wallets are created. No transactions are broadcast. No fees are paid to miners.

[Editor’s Note: OTC transfers by Authorized Participants are regularly registered on-chain, but ETF trades are conducted off-chain, and many OTC trades also occur off-chain between Coinbase Prime account holders.]

The asset can change hands while the network remains largely unaffected.

Capital is deepening, activity is not

The connection between spot price and realized price clarifies this transition further.

Realized price reflects the average cost basis of all coins in circulation. It changes gradually and tends to increase as long-term holders accumulate at elevated prices. Spot price reacts much more swiftly to marginal demand.

Since 2023, realized price has steadily risen, demonstrating that the capital entering Bitcoin is becoming increasingly committed and long-term in nature. In the same timeframe, spot price has consistently overshot, particularly during the ETF-induced rally.

The expanding gap between spot price and realized price conveys a specific narrative.

Realized price continues to trend upward as spot price becomes more volatile, indicating a deeper capital commitment without a corresponding increase in transaction activity.

Capital is entering at a higher cost basis. Existing holders are not transacting more frequently. Network velocity is diminishing.

Bitcoin is increasingly utilized as collateral, a treasury asset, and a long-term store of value. These roles are significantly different from the transactional adoption narratives often suggested by rising prices.

This chart adds economic depth to the broader context. Bitcoin is being accumulated, while its circulation continues to slow.

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A regime shift, not a cycle

The final chart quantifies what the earlier charts imply.

By calculating a rolling 90-day correlation between the adoption index and spot price, it becomes possible to observe how closely price has tracked on-chain usage over time.

From 2020 through most of 2021, the correlation remained consistently positive. Price moved in alignment with adoption, reflecting organic growth within the network. In 2022, the correlation sharply turned negative as price declined faster than usage, indicative of a typical capitulation phase.

The historical relationship between price and adoption has become increasingly unstable in the ETF era, signaling a departure from price movements driven by on-chain usage.

After the introduction of ETFs, that relationship became erratic.

Correlation now fluctuates between positive and negative, often remaining below zero for extended durations. Price movements increasingly fail to reflect shifts in on-chain engagement.

For the first time in Bitcoin’s history, price appreciation is no longer reliably associated with increasing on-chain adoption.

This change indicates a transformation in how Bitcoin is owned, accessed, and valued.

What this signifies for Bitcoin adoption

None of this implies Bitcoin is failing.

The data indicates a network transitioning into a different phase of its lifecycle.

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

Supporting data from UTXO age bands reinforces this narrative. Older coins represent an increasing share of supply, while short-term UTXOs display weaker growth. Exchange netflows also suggest accumulation rather than distribution, and transaction counts have remained relatively stagnant since 2022, even as prices have more than doubled.

UTXO Count – Age Bands shows the number of UTXOs that were last moved within a specified age band. Each colored band represents the number of UTXOs in existence, that were last moved within the denoted time period. (Source: CryptoQuant)

Bitcoin is entering a more capital-intensive, lower-velocity phase.

This shift does not invalidate the asset. It alters how adoption should be measured and how price should be interpreted.

Interpreting price as a proxy for usage is no longer effective in the ETF era.

Bitcoin is being acquired, enthusiastically and at scale. It is simply being utilized less than before.

The blockchain has been signaling this change for some time. The charts make it hard to ignore.

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