Bitcoin transactions hit 18-month low as Runes and Ordinals hype fades

Bitcoin's transaction activity has reached its quietest period in over a year and a half, with the 7-day moving average falling to 316,000 transactions last week before recovering slightly to around 350,000 currently. This represents a dramatic decline from the network's peak activity of over 700,000 daily transactions observed during the height of Bitcoin-based protocol adoption in mid-2024. 

The sharp downturn reflects the cooling of speculative activity around Bitcoin-native protocols, such as Runes and Ordinals, which previously drove substantial transaction volume through token-like functionality and NFT-style inscriptions.

These protocols, which brought Ethereum-style applications to Bitcoin, have largely faded from mainstream attention as trader interest migrated to other blockchain ecosystems offering more native support for such activities. Transaction fees have remained consistently below $1.50 since the start of the year, indicating minimal competition for block space and a return to Bitcoin's traditional use cases for monetary transfers.

The reduced activity has created an unexpected technical situation where some users are attempting to transact below Bitcoin Core's default relay floor of 1 satoshi per virtual byte (sat/vB). Mining pool MARA has begun operating a "Slipstream" pipeline specifically designed to process these non-standard, ultra-low-fee transactions that typical Bitcoin nodes would reject. This development has sparked debate within the Bitcoin development community about network standards and censorship resistance, with some arguing that filtering low-fee transactions contradicts the fundamental principles of Bitcoin.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.