- There was a significant reduction in the number of Bitcoin transactions over the past seven days.
- The dip was related to declining inflows into recently approved spot ETFs.
Transaction costs on Bitcoin [BTC] network fell for the second straight week as users showed less urgency to get their transactions validated quickly.
Bitcoin is getting quieter
This is reported by a blockchain analysis company InTheBlokMiners collected $16.4 million in network usage fees last week, down 30%.
Interestingly, the drop in fees came despite an 8% increase in Bitcoin’s market price.
AMBCrypto analyzed Santiment’s data and found a significant reduction in the number of Bitcoin transactions over the past seven days.
The number of transactions fell from about 631,000 on January 28 to just 328,000 on February 4, a drop of about 48%.
The decline can be partially attributed to less network participation by users. The number of daily active users has fallen by more than 10% in the past week.
Source: Santiment
Because the network was not blocked, users did not have to pay fees to have their transactions recorded in the blockchain database.
According to AMBCrypto’s analysis of Mempool data, the rate with the highest priority was the same as that of the rate without priority. This meant that the queue for unconfirmed transactions was not long enough.
Source: Mempool
Is this the main catalyst?
IntoTheBlock linked the dip in network activity to a decline in inflows into recently approved spot ETFs.
AMBCrypto validated this claim using data from SoSo value. Daily net inflows fell 68% last week. This could most likely have impacted trading activity and thus reduced network usage.
Source: SoSo value
Miners make decent incomes
The positive thing about this development was that miners’ incomes were not significantly affected.
Total miner revenue, including fixed block rewards, rose 4% last week, according to data analyzed by Santiment.
The increase in Bitcoin’s market value, as highlighted earlier, could have offset the decrease in costs.
Source: Glassnode
Read Bitcoin’s [BTC] Price forecast 2024-25
Meanwhile, the Bitcoin market reverberated with greed sentiment, as evidenced by AMBCrypto’s research into Hyblock Capital’s data.
This meant that more traders wanted to collect the king coin, which in turn could help raise prices.
Source: Hyblock Capital