Bitcoin's Mempool Transactions Drop 90% as Retail Activity Wanes

Bitcoin's blockchain is exhibiting signs of waning user activity, despite the cryptocurrency trading near its all-time highs. Currently, Bitcoin is valued slightly under $109,000, marking a 2.7% decrease from its peak and a 7% increase from its 14-day lows. On Saturday, the Bitcoin mempool, which holds unconfirmed transactions before they are added to the blockchain, contained around 5,000 transactions. By press time, this number had risen to 15,000, still significantly lower than the 150,000 transactions seen in late 2024 when Bitcoin first surpassed the $100,000 mark.

Market participants are growing concerned that this low activity could become a persistent issue. Podcaster and Bitcoin advocate Joel Valanzuela expressed his concerns on X, stating that the decline in transactions indicates a serious problem with the network's utility. He suggested that the Bitcoin network may face bankruptcy, undergo major changes, or become a custodial asset controlled by governments and institutions. Since March, mempool transaction counts have fluctuated between 3,000 and 30,000, raising concerns among the community despite the asset's value remaining above six figures for several months.

Joao Wedson, CEO of crypto analytics platform Alphractal, attributes the low mempool numbers to a lack of retail participation. He believes that an increase in mempool transactions would signal a return of retail users, as the growing backlog reflects increased demand for using the network. However, institutional inflow does not appear to be filling the gap. A report by a blockchain analytics firm found that spot demand for Bitcoin was weakening, even as large institutions continued to acquire BTC through ETFs and treasury allocations. The report indicated that net Bitcoin demand contracted by roughly 895,000 BTC over the past 30 days, suggesting that buying from ETFs and companies like Strategy is insufficient to offset declines.

Data from the analysis shows that ETF purchases over a 30-day period have dropped from 86,000 BTC on December 7, 2024, to 71,000 BTC by May 18, 2025, and further down to 40,000 BTC currently, a 53% decline. Strategy’s buying spree also fell to 16,000 BTC in the past 30 days, a downtick of 90% from its peak of 171,000 BTC in December. The analysis suggests that the acceleration of overall demand growth is what drives price rallies, and the current slowdown could mean that institutional demand may no longer be enough to support the current price levels. Large-scale buyers may be reassessing their accumulation strategies.

The sustainability of corporate Bitcoin treasury strategies is also a topic of debate. SkyBridge Capital founder Anthony Scaramucci expressed uncertainty about how sustainable these strategies are, stating that while companies are following the lead of Michael Saylor and Strategy in making BTC purchases, the trend may not continue. He noted that Strategy may be an exception due to its diversified Bitcoin-related operations. Scaramucci advised investors to look through the underlying costs associated with each treasury company, highlighting the need for careful consideration in this rapidly evolving landscape.