Bitcoin Wallet Activity Drops to Lowest Level Since 2010

The proportion of active Bitcoin addresses has fallen to its lowest level since November 2010, according to on-chain data from IntoTheBlock. In June, the weekly active wallet ratio hit a low of 1.22%, peaking at 1.32%, a level last observed in November 2010.

The total number of active wallets has also plummeted to multi-year lows. The week of May 27 recorded just 614,770 active wallets, the lowest since December 2018. This decline in active addresses suggests a significant reduction in buying and selling activity among Bitcoin holders, indicating a period of market consolidation.

Juan Pellicer, a senior researcher at IntoTheBlock, attributes the drop in Bitcoin wallet activity to weaker retail participation compared to previous cycles. “This year’s run to a new all-time high was driven by institutional capital rather than retail investors,” Pellicer explained. He noted that the broader economic situation might have deterred retail investors from making crypto investments as they have in the past.

The decline in activity comes as investors prepare for increased movements from large holders, including the Mt. Gox trustee’s planned distribution of payments to creditors in July. Some large holders, including those linked to governments, have also been observed selling their holdings. Pellicer noted, “Due to this concentration, much of the bearish trading activity is being performed off-chain, which doesn’t significantly impact on-chain address activity statistics.”

The drop in activity might seem unexpected given the launch of Runes, a fungible token protocol introduced to the Bitcoin ecosystem alongside the latest halving event in April. Runes was expected to provide an additional revenue stream for miners, achieving record-high trading fees on the first day. However, transaction fees have since returned to pre-halving levels, and miner reserves, representing new Bitcoin held by miners, are at a 14-year low.

Pellicer mentioned that while activity on Runes has cooled, this is likely a temporary lull rather than a permanent decline due to the cyclical nature of such assets. Meanwhile, recent attention in the crypto space has shifted to memecoins and celebrity tokens, attracting speculators seeking larger gains. Despite Bitcoin’s notorious volatility, its current state appears stable compared to lower cap memecoins.