Key Points
- Bitcoin’s price increased by 69% in Q1 2024, despite a decline in blockchain activity.
- The average daily count of active addresses on the Bitcoin network fell by 5%.
Bitcoin Network Activity Declines in Q1 2024
Despite the significant rally in Bitcoin’s price during the first quarter of 2024, user activity on the Bitcoin network declined. This was revealed in a new report by Messari, an onchain data provider.
They found that during the 90-day period, the demand for the Bitcoin network fell. The average daily count of addresses that completed at least one transaction on the blockchain during the quarter totaled 895,000. This represented a 5% decline from the 937,000 average daily active addresses on the Bitcoin network in the last quarter of 2023.
Decline in Transaction Count and Fees
The decline in the number of active addresses on the blockchain resulted in a fall in the count of transactions completed on it during the quarter under review. According to Messari, average daily transactions on the network fell by 15.3%.
Messari suggested that the transaction decline may have come from decreased activity from bots or “super users” (users that transact often and account for a large portion of the activity). Due to the fall in transaction count on the network, the average fee received per transaction also declined. Overall fees made by the Bitcoin network declined by 42% during the quarter under review.
Bitcoin’s Price Rally in Q1
The year’s first quarter saw a significant rally in Bitcoin’s value. Between 1st January and 31st March, the coin’s price rose by 69%. The coin closed the quarter at $71,310 and reached a new all-time high during that quarter.
Messari said that spot BTC ETFs which received their long-awaited approval in January, “were perhaps the largest catalyst” for the price growth recorded. During Q1, all 11 ETF providers recorded inflows totaling $12.04 billion.
Bitcoin Network Security and Hashrate
Regarding network security, its hashrate increased 19% quarter-over-quarter. As of this writing, the Bitcoin network’s hashrate was 688.8973E, rising by 16% since the beginning of April, according to BitInfoCharts data.
