A majority of the transaction decline stems from a decrease in non-monetary uses such as Inscriptions and Runes. These features contributed to higher on-chain traffic during the last cycle but have since waned.
According to Glassnode, the decline in transaction count is accompanied by a sharp increase in average transaction size. Large holders, including institutions and high-net-worth individuals, are increasingly utilizing the Bitcoin base layer for significant value transfers.
Transactions exceeding $100,000 now account for 89% of total volume, up from 66% in late 2022. Meanwhile, smaller transfers under $100,000 have shrunk to just 11% of total volume, down from 34% over the same period.
Glassnode interprets this trend as evidence of growing whale dominance on-chain, even as smaller investor activity shifts elsewhere. The firm also noted that miner revenue from transaction fees has dropped significantly, now sitting around $500,000 daily, one of the lowest levels observed in the past 18 months.
As on-chain usage declines, trading activity has increasingly migrated to off-chain venues, particularly centralized exchanges. Glassnode notes that the futures market alone averaged $57 billion in daily volume over the past year, peaking at $122 billion.
Importantly, stablecoins have increasingly replaced crypto assets as collateral, particularly following the collapse of FTX. The Glassnode analysts view this as an evolution toward a more mature risk-managed structure in crypto finance.
Featured image created with DALL-E, Chart from TradingView
