Bitcoin Wallet Creation Hits Lowest Point Since May 2018, Suggesting a Decline in Network Activity

The number of new Bitcoin wallets created has plummeted to a level not seen since May 2018, signaling a potential downturn in network activity. According to a recent report from The Block, the seven-day moving average of new addresses in the Bitcoin network dropped to 275,000 for the period from May 13 to May 19, 2024.

This downturn mirrors the levels observed in May 2018, reflecting a significant decrease in the rate at which new participants are joining the Bitcoin network. The decline in new wallet creation is part of a broader slowdown in network activity, with other indicators, including the hash rate, also showing declines.

During the specified period, data from blockchain analysis portal Glassnode confirmed this trend, recording a daily creation of new addresses as low as 223,836 on May 12, 2024. Throughout the week of May 13 to May 19, the number only once reached as high as 300,000, a stark contrast to the daily figures ranging from 350,000 to 400,000 seen in April.

The fall in network activity is further evidenced by the decreasing number of active addresses. Since the end of April 2024, there has been a noticeable downward trend in daily active addresses, according to data from BitInfoCharts. This decrease suggests a lower level of interaction and transaction within the network, which could have various implications for both users and investors.

Additionally, the hash rate, which is a measure of the computational power used to secure and process transactions on the blockchain, has also declined. Following a sharp increase after the latest halving event, the hash rate has started to decrease, indicating potential shifts in miner behavior and network security dynamics.

In terms of market response, Bitcoin's price has also seen fluctuations. Over the last 24 hours, the price of Bitcoin fell from $67,000 to $66,280, with a slight upward trend observed on the morning of May 20, according to TradingView.

This trend aligns with forecasts from financial experts at QCP Capital, who remain optimistic about Bitcoin's potential to return to its previous historical highs. However, the current decline in network fundamentals, such as new wallet creations and active addresses, suggests that the road to recovery might be challenging and could depend on broader market conditions and investor sentiment.

As the cryptocurrency market continues to evolve, these indicators are critical for understanding the underlying health and activity level of the Bitcoin network. Stakeholders, including investors and users, will need to keep a close eye on these trends to make informed decisions in a rapidly changing market environment.