Bitcoin's network activity has declined to its lowest level in twelve months, with the 7-day moving average of active addresses falling to approximately 660,000. This marks the lowest point since December 2024, when the network experienced peak activity driven by Ordinals and Runes speculation.
The weakness extends across multiple network metrics and has placed downward pressure on miner economics. Daily miner revenue has declined from an average of $50 million during the third quarter to roughly $40 million as the year closes. Notably, this revenue is now almost entirely composed of the block subsidy rather than transaction fees, highlighting limited demand for Bitcoin blockspace.
An unusual dynamic has emerged in Bitcoin's transaction composition. While Runes transactions now account for a larger percentage of total network transactions, they contribute only 5-10% of total fee revenue. These transactions are often submitted with very low fees but are still processed due to the current cheap blockspace. This high transaction count with minimal fee generation raises concerns about the fundamental demand for blockspace, suggesting a mismatch between network utilization and value creation.
The decline in active addresses is interpreted by on-chain analytics platforms like CryptoQuant and BitInfoCharts as a significant retreat in retail user activity. However, institutional interest in Bitcoin is reported to remain steady, with entities focusing on long-term investment strategies. Historical patterns show similar declines in active addresses followed bull markets in 2018 and 2022, often preceding accumulation phases before significant uptrends.
As block subsidies continue to diminish with each halving cycle, the sustainability of miner revenue will increasingly depend on transaction fees from users willing to pay for scarce blockspace. The current trend underscores a critical challenge for the network's long-term economic security.
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