Bitcoin Active Addresses Decline, What Are The Causes?

[Rashlyowl]

BTC was the first & became the starting point for all the cryptocurrencies we see today. Besides being the first & revolutionary, BTC also the largest in terms of market capitalization, dominates 59% of the existing market share in crypto.



It's all about economics, I'm not done there, because in fact, BTC adoption is also strengthening with many countries having BTC plans as a strategic reserve. With all those positive conditions, we should be looking for optimism. However, behind those positive conditions, there's one thing that's disappointing for me. As the thread title suggests, it is a decline in active BTC addresses.

1 Year Record


In the 1 year record, the all time high was 810.755k (August 8 2025) & the lowest 112.026k (December 14 2025).

3 Years Record


In the 3 years record, the all time high was 1.087m (September 15 2023) & the lowest 112.026k (December 14 2025)

This severe decline started & happened only this year, what's up with this year & what does it have to do with BTC?

Some assume this is because of centralized platforms, people prefer to use them rather than doing on-chain activities. Some also think that BTC tokenization is the cause, because people no longer have to do activities on the native BTC network, they can do it on altcoin networks, or... is this related to ETFs?

Honestly, this thread was inspired by a local thread we have, because I was hoping for more varied & concrete answers on this issue, so I made a global board version of it. Respect to bros @mu_enrico who gave me permission to open a similar thread on global board.

[bitbollo]

I havent seen your local thread but ...there can be many reasons to explain this decline.
- people are using less bitcoin for daily transaction (or, with l2, at least less on chain - less address used)
- consolidation! due the point above people are using more for storing and not transacting
- ponzi! if I am not wrong, a couple of big ponzi have been shut down and they have involved millions of transactions...
- optizimation on inputs and outputs for single transactions

[Asuspawer09]

I mean we just experience a huge setback in the past month due to the huge drop in market price, the market is really hype in the past month because it suddenly skyrocket from around 50k$ to a all time high of around 126k$ which is like 2 times of the market price, I remember doing Dollar Cost Averaging and then all of a suddent market price is out of control and profit is everywhere luckily I was able to sell at the top of the market atleast.

The market was just so hype up because of the skyrocketing market price, and when market is on a huge rally investors are always expect a even higher market price so they are surely speculating a even higher market price, but since we get punished and experience a huge drop in the market price a lot of traders and surely on hiatus mode, or more like holding status on there investment trying to survive the possible upcoming bear market. That is probably why a lot of Active address is declining, I mean, personally, I was on hiatus as well, just holding and trying not look at the market at this time, but still would never sell, still trying to accumulate more Bitcoin.

[Renampun]

Some assume this is because of centralized platforms, people prefer to use them rather than doing on-chain activities. Some also think that BTC

This could be one of the strong reasons why the number of active Bitcoin addresses is decreasing because more people use exchanges to carry out their trades and transactions, because exchanges are more accessible and more familiar to beginners and most users who don't really understand self-custody or find it too complicated about non-custodial wallets, so with this, most people choose to use exchanges to do their things.

another reason is a shift in perception where most people think that Bitcoin is more suitable as a store of value, not for more frequent use, so many users prefer to keep their assets for the long term and let them grow over time.

[coolcoinz]

The chart shows the number of addresses went down a bit and then stabilized, which would suggest an active trader going offline. For instance an active trading firm that uses a bunch of addresses, maybe bots?

I don't think there were any significant news in mid August to explain that sharp drop, so it's probably some kind of bot farm. China was spreading some FUD in August about banning bitcoin, so maybe it was a Chinese traders?

As for the current slow decline, people aren't spending bitcoin because we consider the price as "low". You can see it on many indicators like RSI being as low as during bear market bottoms and fear and greed sitting at extreme fear for weeks. When you see price as low, you stop spending. When we were above 100k I was buying some electronics for myself and my family, but right now I'd rather wait and save bitcoin than buy a new phone or PC.

[MusaMohamed]

The chart shows the number of addresses went down a bit and then stabilized, which would suggest an active trader going offline. For instance an active trading firm that uses a bunch of addresses, maybe bots?

It does not reflect all reasons of Bitcoin owners and their less activitites recent months but something are possible like they have turned to be inactive by their understanding about power of holding for their profit. Hence, they chose to hold bitcoin a long time for better ROI, and stopped trading actively.

Another possibility is they bought at high prices, stucked in the market and don't want to exit with smaller profit or temporary loss now, so they unintentionally turned to be holders.

Another contribution is from Bitcoin Spot ETFs that approved in January 2024 and have operated many months since that month.
The trend is more inactive UTXOs with time contributed by both lost Bitcoin wallets and well-minded holding practice and the Bitcoin HODL waves chart can help exploring this trend.
https://www.bitcoinmagazinepro.com/charts/hodl-waves/
https://charts.bitbo.io/hodl-waves/
https://www.unchained.com/hodlwaves

[Darker45]

This is indeed an interesting observation. There was a sudden big drop in August. There wasn't any recovery ever since, even despite the price climbing to an ATH in October. There must be a combination of factors, but I guess the main reason is the massive shift of transactions from on-chain to off-chain. Thanks to various Bitcoin-based products in the traditional market many who want Bitcoin exposure are doing their things off the network. Falling transaction fees seem to corroborate this. The fees have gone down very low, even hitting 0.1 Sat/vB.

Or perhaps there's also a big drop in speculation in the retail market. Either that or everything's now done in centralized platforms, which themselves aren't anymore moving funds on-chain every once in a while. Exchanges are probably transferring funds to cold storage in huge bulks. All this and other factors must have contributed to a significant decline of active Bitcoin addresses.

[JeromeTash]

Here is what I think;
1. More and more people are using centralized exchanges than back then, where self-custody was common. And with centralized platforms, they do even perform internal transfers which leads to less address use

2. Increase in popularity for some altcoins and platforms such as Jupiter, Orca, Raydium etc where altcoin and memecoin trading is always happening. So some people are even forced to swap BTC to altcoin BTC

3. The Bitcoin network spammers who made the Bitcoin network fees to go up made so many people abandon using the network for a while. I was one of those people. Yes, there was high activity by those JPEG spammers, but with time their ordinals also lost popularity, meaning less network/address activity. During that time, some people choose alternate networks and have never looked back

4. Obviously ETFs, this is self-explanatory

5. The Bitcoin price hasn't really followed the trajectory people really expected. So some are expecting it to go up further which means more HODLing while others have moved on onto altcoins for higher volatility.

[pooya87]

Most probably something broke in the bitinfocharts.com code they use for detecting and counting active addresses* because such a sudden decline doesn't look natural to me. Such drops usually happen in a much smoother way taking a lot longer. Considering that the spam attack and abuse has not truly gone away, there is no explanation for this type of drop either.

If you use other sources like the ones below which I found on google, they don't show a similar sudden drop.
https://cryptoquant.com/asset/btc/chart/addresses/active-addresses?window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line
https://studio.glassnode.com/charts/addresses.ActiveCount?a=BTC&s=1735108199&u=1766644199&zoom=365

They show the same ups and down and are usually reporting 700k range not the 100k range that bitinforcharts show.

* Maybe they stopped counting transactions paying lower than 1 sat/vb fees since I think that's roughly the same time such low rates grew in number.

[JeffBrad12]

You have to ask the bitinfocharts guys about what they changed in their code that has stopped counting the active addresses because such a sudden decline doesn't look natural to me. Such drops usually happen in a much smoother way taking a lot longer. Considering that the spam attack and abuse has not truly gone away, there is no explanation for this type of drop either.

I'm with this as well, the sudden drop doesn't make sense. There are people who moved from self custody to ETF but the number won't be this great and the decline happened within just 1 month.
I'd bet it that the logic to count the address is broken and doesn't display proper information anymore than anything else like as you said.
Or it simply changed criteria and filters out big chunk of addresses that were considered active earlier.

[Outhue]

I could be wrong but it was confirmed that many investors are taking profits aggressively, I have heard this countless times this month alone, some people are just too good at tracking, I believe these people are smarter because they must have been into Bitcoin at $20,000+ or so, they are still in profit right now and that's why I believe that the price of Bitcoin will keep going down for now.

Some are already predicting that Bitcoin is going down to $10,000 but I have my doubts, so many whales are still in profits and now eyes are opened, many of them knows when to jump right back into Bitcoin at the lows, it's not something to be worried about, I will say we should learn from these smart people, holding has it's rewards but taking profit is also a very smart move.