The number of new Bitcoin addresses has fallen to a 2018 low
Date: 2024-05-21 Author: Oliver Abernathy Categories: BUSINESS
According to The Block analysts, the number of new Bitcoin addresses fell to 275,000 per day over the past week, which is the lowest level since the beginning of 2018. Just six months ago, this figure was approaching the record of December 2017, when the number of new addresses reached 625,000 per day.
The hype around Bitcoin ETFs
Experts attribute the local peak in activity recorded six months ago to the excitement surrounding the upcoming approval of spot Bitcoin-based exchange-traded funds (ETFs) in the United States. Spot BTC-ETF trading in the US opened on January 11, and since then, 11 funds have raised $12.63 billion, amassing $56.26 billion worth of Bitcoin. However, daily inflows fell 79% from the record $1.05 billion recorded on March 12.
Impact of the Ordinals Protocol
The launch of the Ordinals protocol in January last year also contributed to the growth of network activity. Ordinals allowed users to create Bitcoin NFTs, which created a buzz around such projects. However, to date, the daily issuance of non-fungible tokens on the Bitcoin network has fallen 98% from its peak on November 19, when 475,249 tokens were issued.
Reduced rewards for miners
The fourth halving on the Bitcoin network took place on April 20, as a result of which the reward for mining blocks was reduced from 6.25 to 3.125 coins. Halving, which occurs every four years, significantly impacts miners and the overall Bitcoin economy.
New Runes protocol
Almost simultaneously with the halving, a new protocol, Runes, was launched from the creator of Ordinals, which allows the issuance of fungible tokens. This launch also contributed to the current market dynamics.
Development of L2 networks
At the beginning of the month, the mainnet of the Build on Bitcoin L2 network was launched, on which several dozen applications are already available. This event represents a major development in the Bitcoin infrastructure, offering new opportunities for developers and users.
The decline in the number of new Bitcoin addresses to 2018 levels reflects ongoing changes and challenges in the cryptocurrency ecosystem. While Bitcoin ETF hype and the launch of new protocols have temporarily increased activity, long-term factors such as halving and new technological developments continue to have a significant impact on the market.
