A recent report by Citi indicates a stalling network activity on the Bitcoin (BTC) blockchain and a decline in activity on Ethereum (ETH).
Assessment of Network Activities
Network activity is a crucial metric to gauge user engagement in a blockchain project. As per Citi, stagnant network activity may signify a lack of user transactions, affecting block miners’ rewards. Recent data shows Bitcoin’s network activity oscillating since April 2024, coinciding with a downward trend in BTC prices.
The Ethereum network also displays a drop in daily transactions, from 1.37 million on March 19 to 1.12 million on September 5.
The number of unique addresses transacting on Bitcoin reduced significantly, indicating diminished user engagement, while Ethereum maintained stable address usage. However, the reliability of this metric could be impacted by users having multiple wallet addresses.
Furthermore, Bitcoin and Ethereum exchange-traded funds witnessed net outflows, reflecting investor uncertainty amidst economic fluctuations, with Bitcoin ETFs alone experiencing outflows of $305 million by August 31, 2024.
Correlation with Stock Market
Citi’s report suggests that the digital assets market will likely continue to closely follow equities. Conversely, a recent Santiment post suggests that Bitcoin might become less influenced by stock market trends and could eventually detach from them.
Despite market trends, prominent Bitcoin proponents like Michael Saylor remain optimistic about the digital currency, with Saylor profiting approximately $400 million from the planned selling of MicroStrategy shares.
Currently, Bitcoin is trading at $54,097, a 3.3% decrease in the last 24 hours, while Ethereum trades at $2,292, down by 3.2% in the same period.
