The Surprising Disconnect Between Bitcoin’s Price and Network Activity

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

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

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

Fewer Wallets, Fewer Transactions

Active addresses are commonly used to measure how many unique participants are transacting on the network, while network growth tracks the creation of new addresses interacting with Bitcoin for the first time. Based on these metrics, Santiment said Bitcoin is attracting fewer new participants and generating less day-to-day transactional activity than it did during the height of retail-driven enthusiasm five years ago.

The decline has occurred even as BTC’s price has remained well above its 2021 levels for much of the current market cycle. Santiment explained that one factor behind the trend could be the increasing 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 firm also noted that many long-term holders have become increasingly passive, choosing to store their BTC rather than transact frequently. As a result, the network remains highly valuable but is less active than it was during the retail-fueled rally of 2021. However, Santiment said the slowdown in activity should not automatically be viewed as a bearish signal.

Strong price swings have historically encouraged more activity on the Bitcoin network. This time, the decline appears to be linked to a lack of major price movement, as well as growing interest from investors in traditional markets such as equities and gold.

Attention Returns Despite Weak Activity

Investor attention in the broader crypto market has begun to recover. May witnessed a renewed focus on digital assets, with discussions surrounding Bitcoin rising by roughly 24% compared to April. According to Santiment, the increase indicates that traders are once again positioning for opportunities in the crypto market, even as capital deployment remains selective and broader participation is still weak.

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At the same time, the firm observed a growing shift of investor attention toward traditional equities. Strong performances from technology, artificial intelligence (AI), semiconductor, and defense stocks have encouraged many traders to diversify beyond crypto, while discussions around stocks and ETFs have become increasingly common within crypto-focused communities.

Regulatory developments also remained a major point of interest. Santiment noted that optimism surrounding the CLARITY Act continued to build throughout May, as market participants anticipated long-awaited regulatory guidance for digital assets in the United States. However, repeated delays and procedural hurdles left the legislation unresolved by month-end, which turned some of the initial optimism into frustration.

Meanwhile, Strategy remained one of the most closely watched Bitcoin-related companies. The firm’s disclosure of a 32 BTC sale – the first publicly reported Bitcoin sale in its history – sparked debate over whether its long-standing “never sell” philosophy is evolving.  But the sale appears tied to managing preferred stock obligations rather than a change in Strategy’s Bitcoin approach. The company still holds 843,706 BTC.