Bitcoin sees surge in new addresses as its price drops

Despite the market downturn, the number of new addresses on the Bitcoin network has reached a two-month high, with the seven-day moving average (7DMA) recording over 317,000 new addresses on Friday, July 5. This increase is particularly noteworthy given that BTC's price has fallen by over 10% during the same period.

To put this in perspective, the beginning of last week saw the 7DMA at just 263,000 new addresses. This marks a substantial 20% week-on-week increase.

So, what does this mean for the Bitcoin network?

One might assume that an increase in the number of new addresses in a network would lead to increased activity, right? Well, not necessarily.

The seven-day moving average of the average transaction fee on Bitcoin reached lows of just $1.75. Meanwhile, Ethereum's seven-day moving average of the average transaction fee stands at $2.50. For context, just three months ago, the 7DMA of the average transaction fee on Bitcoin was over 10 times higher than Ethereum’s.

The total fees paid on Bitcoin have also severely underperformed Ethereum, with the seven-day moving average of total fees paid on the network being $1 million, just one-third of Ethereum. This is a notable fall from grace for the Bitcoin network.

This discrepancy highlights an intriguing dynamic within the Bitcoin network. While new participants are joining, they are not necessarily translating into higher transaction fees or increased on-chain activity for now.

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