Bitcoin's Dominance Wanes as Network Activity Plummets

Bitcoin's network activity has reached a 12-month low, with transaction volumes plummeting to levels not seen in a year. This decline has prompted a reevaluation of Bitcoin's utility and a shift in trading dynamics towards alternative blockchain ecosystems.

According to COINOTAG, the diminishing relevance of Bitcoin-based protocols is evident, with these protocols now contributing less than 1% to overall transactions. Bitcoin's transaction volumes have dwindled to 330,000 weekly, signaling a potential shift away from its historic dominance in the crypto market.

The 7-day moving average for Bitcoin transactions recently fell to approximately 330,000, which is around 12-month lows. This marks a significant decline from the peak of 730,000 transactions, translating to a decrease of roughly 55%. Such a substantial drop raises crucial questions about the present and future utilization of the Bitcoin network.

This change is not merely reflected in transaction counts but also in the transaction fees, which have stabilized at around $500,000 over the past month. This reduction follows heightened levels seen towards the end of 2024, when increased network activity drove fees higher. The decline in transactions indicates that many earlier speculative users may have shifted their focus elsewhere.

With transaction levels notably lower, traders are increasingly drawn to other blockchain platforms. For instance, Solana has emerged as a preferred choice for memecoin trading, reflecting a significant shift in trader engagement. Meanwhile, the Base protocol has gained popularity as the main hub for AI agent tokens, highlighting the diverse interests among cryptocurrency traders.

The sustained engagement in these alternative ecosystems suggests that while Bitcoin retains its status as the largest cryptocurrency by market capitalization, it may not be the focal point for innovation and trading activity anymore. The implications of this trend could affect Bitcoin's long-term viability as new projects emerge outside its original framework.

Protocols on the Bitcoin network, such as Runes and Ordinals, have pivoted from being hotbeds of activity to accounting for less than 1% of transactions. This downturn is particularly evident when considering the revenue generated from Runes, which plummeted from an impressive $60 million on its launch day to less than $20,000 in the past month.

The escalating challenge lies in rebuilding interest