Bitcoin Network Activity Falls 53% to One-Year Low as RUNES Protocol Transaction Volume Crashes
Activity on the Bitcoin (BTC) network has plunged to a 1-year low. According to figures published by on-chain and market data analytics platform CryptoQuant, the total number of daily transactions fell by 53%, from a high of 734,000 within the last year, to 346,000. However, CryptoQuant predicts a price increase in the near future.
As the world’s largest cryptocurrency by market capitalization, Bitcoin has many uses in the crypto and traditional sectors. This utility supports Bitcoin’s stability and price health even when network activity is poor, in line with CryptoQuant’s prediction. In addition to its use as an investment vehicle, Bitcoin is also a popular choice in the iGaming sector, especially among privacy-focused casino platforms. Nearly all the no-KYC casinos you can trust accept Bitcoin and several other cryptocurrencies as a means of deposit and withdrawal. In addition to protecting player privacy, the platforms also reward customers with great bonuses and cashback, free transactions, and unique features like quests and tournaments.
CryptoQuant Details Plunge in Bitcoin Network Activity
Another metric that indicates the crash in Bitcoin activity is the reduction in the volume of mempool transactions. The Bitcoin mempool, which is a pool of unconfirmed transactions before they are added to blocks, crashed from 287,000 in December to 3,000 on Thursday. The last time the mempool activity fell this low was in March 2022.
According to CryptoQuant, reduced application of the Runes Protocol is one major factor behind the plunge. Used to design fungible tokens on the Bitcoin blockchain, the protocol helps to simplify token issuance without compromising the security and decentralization of the entire network. Currently, activity on the RUNES protocol is poor. CryptoQuant wrote:
“The decline in Bitcoin’s network activity can be mostly explained by the collapse in the use of the RUNES protocol to mint tokens on the Bitcoin network. This is evident in the total daily number of OP RETURN codes in Bitcoin transactions, which the RUNES protocol uses to write data about token mints and transfers on the network.”
CryptoQuant notes that when the protocol was launched in April 2024, the number of daily OP_RETURN codes hit 802,000. Now, this volume has plunged by more than 98% to 10,000. In general, CryptoQuant’s Bitcoin Network Activity Index – which considers several metrics including block size, transaction volume, fees, and number of active addresses – has fallen 15% from its November high and hit 3,760, the lowest since February 2024.
Bitcoin Price Expected to Maintain Stable Health
Interestingly, all of the underperformance is not expected to affect the price of Bitcoin because the demand for Bitcoin Permanent Holder is rising. In an X post, CryptoQuant noted that this acceleration is associated with an increase in Bitcoin prices and indicates the extent of Bitcoin’s application as a store of value and an investment channel. These Permanent Holders comprise users who purchase a lot of Bitcoin over time and hold their assets long-term instead of spending them. An increase in accumulators could stabilize the price of Bitcoin and potentially spike it despite a reduction in network activity.
Another factor thought to indicate positive Bitcoin performance is giant asset manager BlackRock’s recent decision to increase its stake in Strategy (formerly MicroStrategy), the business intelligence company with a strong reputation as one of the world’s largest corporate Bitcoin investors. BlackRock ended Q3 of 2024 with a 4.09% stake in the company, and has now increased it to 5%, as indicated in a February 6 filing with the United States Securities and Exchange Commission (SEC).
Interestingly, as Bitcoin price stagnates and network activity reduces, other assets are gaining traction. Real-world assets (RWAs) tokenized on a blockchain are set to attract attention as investors seek access to stable alternatives. Experts also suggest that a recent interest in blockchain tokenization from major financial giants like JPMorgan and BlackRock could push the RWA market to $50 billion in total value locked (TVL).
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