The number of active Bitcoin addresses has dropped to its lowest level in a year, raising new concerns about the demand for block space

According to The Block, as the end of the year approaches, the activity level of the Bitcoin network has dropped to its lowest point in 12 months, with the 7-day moving average of active addresses falling to 660,000. While a seasonal slowdown is expected, several network indicators have shown signs of weakness. Currently, the number of active addresses is at its lowest level since December 2024, when network activity peaked due to the speculative frenzy around Ordinals and Runes.

The weakness in network activity has also put downward pressure on miner economics. Daily revenue for miners has decreased from an average of $50 million in the third quarter to about $40 million. This revenue comes almost entirely from block subsidies rather than transaction fees, highlighting the limited demand for Bitcoin block space. There has been an unusual dynamic change in the composition of Bitcoin transactions. Nowadays, Rune transactions account for a larger share of the total transaction volume on the network, but only contribute 5% to 10% of the total fee revenue, raising concerns about the demand for block space. When the fees generated from half of Bitcoin's transaction throughput are negligible, it indicates a mismatch between network utilization and value creation.