Network Activity Lukewarm On Bitcoin And Ethereum
- WBOYOriginal
- 2024-09-08 03:47:10538browse
One of the key metrics used to ascertain user interest in a blockchain project is the measurement of its network activity.
A recent report by Citi has highlighted a slowdown in network activity on the Bitcoin (BTC) and Ethereum (ETH) blockchains, while also noting the impact of economic uncertainties on investor sentiment towards cryptocurrencies.
Key Takeaways
- Network activity on the Bitcoin blockchain has stalled, while it is dwindling on Ethereum.
- Both Bitcoin and Ethereum ETFs have witnessed net outflows, indicating weak conviction among investors.
- The crypto market is expected to remain highly correlated with equities.
According to data from blockchain.com, the number of confirmed transactions per day on the Bitcoin network have been fluctuating within a range since April 2024. This slowdown in network activity could be a sign of decreased user interest or transaction volume on the Bitcoin blockchain.
Meanwhile, a chart of Ethereum daily transactions shows a slight decline from around 1.37 million on March 19 to 1.12 million on September 5.
Network activity on any blockchain is often influenced by the number of users or unique wallet addresses utilizing the network. As of September 4, 2024, the number of unique addresses used on the Bitcoin network had decreased to 539,154, compared to 1,017,545 addresses on September 14, 2023. In contrast, the number of unique addresses on Ethereum remained relatively stable.
It's important to note that some users may have multiple wallet addresses, which could slightly impact the reliability of this metric.
Furthermore, the report highlights that Bitcoin and Ethereum exchange-traded funds (ETFs) have experienced net outflows, indicating a lack of conviction among investors to hold digital currencies during periods of economic uncertainty.
Specifically, Bitcoin ETFs witnessed outflows to the tune of $305 million on August 31, 2024.
Highlighting the close relationship between cryptocurrencies and traditional markets, the report notes that the digital assets market is expected to remain highly correlated with equities.
However, a recent post on X by Santiment suggests that Bitcoin is becoming less sensitive to trends in the stock market and could eventually decouple from it over time.
Despite the overall bearish sentiment, Bitcoin permabulls, such as MicroStrategy CEO Michael Saylor, continue to place their bets on the leading digital currency.
Recent reports indicate that Saylor has earned approximately $400 million from planned daily sales of about 5,000 MicroStrategy shares.
At press time, BTC is trading at $54,097, down by 3.3% in the last 24 hours. ETH is trading at $2,292, down by 3.2% in the same duration.
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