Original Title: "Bitcoin Hits New Highs While ‘On-Chain Transactions Hit 19-Month Low’: What’s Happening in the Market?"

Author: 0xJigglypuff, BlockTempo

The Bitcoin market recently displayed a significant divergence between price and on-chain activity: while its price continues to challenge historical highs, daily transaction counts are quietly sliding downward. What exactly is happening? Below are some nuanced changes potentially unfolding within the Bitcoin market.

Transaction Volume Bottoms Out as Price Soars

The seven-day moving average of Bitcoin network transactions recently hit a 19-month low. According to data from The Block, the figure stands at approximately 317,000 transactions, marking a new low since October 2023. Additionally, YCharts indicates that on June 1, 2025, only about 256,000 transactions were included in blocks. As transaction activity cools, some extremely low-fee transactions have been processed, including those priced below Bitcoin Core's default relay minimum fee (1 sat/vB).

Mempool founder Mononaut reported a transaction with nearly zero fees (0.1 sat/vB, approximately $0.01) that was mined by MARA through its low-fee transaction channel, Slipstream, after sitting idle for a month. Mononaut described this as a meticulously crafted transaction:

“Designed with only the most precise hexadecimal characters, this transaction cost merely 11 sats, roughly $0.01, and lingered in the mempool for an entire month.” Such deliberately placed transactions, enabling them to execute at below-market prices, have sparked some controversy. Critics have labeled these as Bitcoin spam.

Core Policy Debate: A Tug-of-War Between Openness and Order

In response, 31 Bitcoin Core developers published an open letter on June 6, arguing against rejecting the relay of low-fee or non-standard transactions as long as miners are willing to include them. They contend that this approach is essential to Bitcoin’s nature as a censorship-resistant system. They emphasize that this stance does not endorse the use of Bitcoin for non-financial data but rather recognizes that Bitcoin might be used for purposes not universally agreed upon. Forcing users onto private channels would undermine decentralization, they argue.

However, this statement has drawn criticism from some in the community. Samson Mow, founder of Jan3, stated on the social platform X: “Bitcoin Core devs have been progressively altering the network to enable spam, and now they seem focused on removing barriers for spammers. Simply saying, ‘That’s how it works, tough luck,’ is disingenuous.”

One of the core controversies lies in the decision by Bitcoin Core developers to remove the 80-byte data cap for transaction relay, allowing for the embedding of larger data. Developers argue that this change improves transaction packaging predictability and accelerates block propagation, but critics worry it could lead to centralization and issues with "spam data."

Supply Decrease, Wallet Numbers Increase

Despite a drop in transaction count, other on-chain metrics paint a different picture. The supply of Bitcoin on exchanges has dropped to a nearly seven-year low (below 11%), mainly due to the trend of long-term holding (HODLing) and increased institutional adoption. ETFs and corporate buyers are continuously absorbing market liquidity.

Additionally, data from Santiment indicates that the Bitcoin inflows from large holders ("whales") have grown significantly by 145% to 214% over the past 7 to 30 days. Wallet creation numbers are also on the rise. For instance, May 29, 2024, saw nearly 557,000 new wallets created in a single day, marking the highest single-day record since December 2023.

At the same time, metrics show that transaction volume in USD terms occasionally remains massive, with single-day volumes exceeding $44 billion, suggesting that large institutional transfers are still occurring frequently.

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