recent update from The Block notes that the average number of new Bitcoin addresses added to the blockchain daily has fallen significantly over the past six months. Just six months ago, around 625,000 addresses were being generated weekly. However, recent data shows only around 275,000 per week - the lowest level since early 2018.
This downward trend aligns with declining excitement around recent Bitcoin developments like proposed spot ETFs and upgrades like Ordinals. More people appeared interested in obtaining Bitcoin for the first time when such events were anticipated earlier this year. But now the hype has died down.
Underlying Factors
Several related on-chain metrics have also seen downward trends, suggesting reduced usage and engagement beyond new users. Transaction fees, daily transaction volumes, and miner revenue have all fallen sharply. Fewer transactions mean less need to generate fresh Bitcoin addresses.
Lower miner revenue means Bitcoin's proof-of-work security model is incurring reduced costs to enforce. However, there are always fluctuations in blockchain activity over time. Periods of less usage do not inherently threaten the protocol.
Potential for Recovery
While near-term metrics have cooled off, investor interest in the Bitcoin ecosystem remains high. Venture capital funding into startup projects built around Bitcoin protocols continues rising. This indicates developers still see opportunities.
As new applications emerge that give Bitcoin holders more to do with their coins, it could spur another upswing in engagement numbers like daily active addresses. Increased usability and real-world functionality may convince more fence-sitters to open their inaugural Bitcoin wallets once again. Only time will tell if such developments materialize to reverse the recent downtrend in new users.
