The sudden disconnect between Bitcoin price and network activity

Bitcoin is much less active than it was in 2021, as institutional exposure through ETFs and funds grows.

Cross-chain Bitcoin activity remains well below levels seen during the peak of the 2021 bull market. In May 2021, the network averaged approximately 1.12 million active addresses per day and approximately 489,000 newly created wallets per day.

Today, those numbers have dropped to about 624,000 active addresses and 278,000 new wallets per day. Compared to the peak of the 2021 bull market, these numbers are down about 44% and 43%, respectively, according to Santiment.

Fewer wallets, fewer transactions

Active addresses are commonly used to measure the number of unique participants transacting on the network, while network growth tracks the creation of new addresses that interact with Bitcoin for the first time. Based on these metrics, Santiment He said Bitcoin is attracting fewer new participants and generating less daily transaction activity than during the height of the retail-driven enthusiasm five years ago.

This decline occurred despite the price of Bitcoin remaining well above its 2021 levels during most of the current market cycle. Santiment explained that one factor behind this trend could be the growing role of spot bitcoin ETFs and other institutional investment vehicles, which allow investors to gain exposure to the asset without moving coins on-chain or creating new wallets.

The company also noted that many long-term Bitcoin holders have become increasingly passive, choosing to store their Bitcoin rather than transact frequently. As a result, the network remains highly valued but less active than it was during the 2021 retail rally. However, Santiment said a slowdown in activity should not automatically be viewed as a bearish signal.

Historically, strong price fluctuations have encouraged more activity on the Bitcoin network. This time, the decline appears to be related to the lack of significant price movement, as well as increased interest from investors in traditional markets such as stocks and gold.

Attention returns despite weak activity

Investor interest in the broader cryptocurrency market has begun to recover. May saw a renewed focus on digital assets, with discussions around Bitcoin up nearly 24% compared to April. According to Santiment, the increase Pointing Traders are once again bracing for opportunities in the cryptocurrency market, even as capital allocation remains selective and broader participation remains weak.

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At the same time, the company has noticed a growing shift in investor interest toward traditional stocks. The strong performance of technology, artificial intelligence (AI), semiconductor and defense stocks has encouraged many traders to diversify beyond crypto, while discussions of stocks and ETFs have become increasingly popular within crypto-focused communities.

Regulatory developments also remained a major point of interest. Santiment noted the optimism surrounding the clarity law continued It will be built throughout May, as market participants anticipate the long-awaited regulatory guidance for digital assets in the US. However, repeated delays and procedural hurdles left the legislation unresolved by the end of the month, turning some initial optimism into frustration.

Meanwhile, Strategy has remained one of the most closely watched Bitcoin-related companies. The company’s revelation of the sale of 32 bitcoins — the first publicly reported bitcoin sale in its history — has sparked debate over whether its long-standing “never sell” philosophy is evolving. But the sale appears tied To manage preferred stock liabilities rather than change the strategy’s Bitcoin approach. The company still owns 843,706 Bitcoin.