Bitcoin (BTC) network activity has seen a notable decrease in the formation of new addresses, hitting its lowest mark since July 2018. Despite this trend, BTC is currently trading around $67,000, marking a gain of over 7% in the past week.

Decline in Bitcoin Network Activity

Data from the market intelligence platform IntoTheBlock shows a 7-day average of only 276,000 new Bitcoin addresses. This substantial drop reflects fewer new investors entering the cryptocurrency space, sharply down from 625,000 six months ago. The "New Addresses" metric tracks the daily creation of new wallets on the BTC network. While high figures typically indicate an influx of new investors, returning investors and holders creating multiple wallets for privacy also contribute to this number. Nonetheless, a high count of new addresses generally signals long-term bullish sentiment for Bitcoin.

Alongside the decrease in new addresses, other associated indicators have also displayed a downward trajectory. Miners' revenue, measured by computational power, has hit a new historical low. Transaction fees and on-chain transaction volume have likewise decreased, indicating an overall plunge in Bitcoin network activity. Typically, increased network activity signifies rising demand and price stability. However, the current decline suggests investors may be shifting towards derivatives speculation rather than organic use.

Spot ETFs Divert Attention from On-Chain Transactions

The recent approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has offered investors a traditional investment avenue into BTC. This development might have diverted interest away from on-chain transactions and contributed to the decrease in new addresses.

Given these shifts and the high transaction fees stemming from excitement surrounding Runes, the seven-day moving average has fallen below 700,000 for the first time since March 2020. While fees have stabilized, decreasing from an average of $31.4 on April 23 to $2.97 on May 18, the number of active addresses remains low.

Lower network activity, indicated by a multi-year low in the 30-day active address count, suggests reduced demand for Bitcoin transactions. This metric, tracking different addresses participating in transactions over 30 days, has dropped to 12.64 million, a level last observed in February 2019.

The broader slowdown in the crypto market may have also contributed to the decline. According to CoinGecko, the global crypto market cap stands at $2.53 trillion today, reflecting a 0.7% decrease in the last 24 hours. Many altcoins, including Ethereum (ETH), BNB, XRP, and Toncoin (TON), have experienced negative trading over the past day.