The Bitcoin blockchain is showing signs of declining user activity, despite the coin trading close to all-time highs. Bitcoin is changing hands slightly under $109,000, 2.7% less than its all-time high value, on an uptick of 7% from its 14-day lows, per Coingecko data.
On Saturday, only around 5,000 transactions were waiting in the Bitcoin mempool, the virtual queue where unconfirmed transactions are held before being added to the blockchain by miners.
At press time, the number had risen to 15,000, still a fraction of the 150,000 seen in late 2024 when BTC first crossed the $100,000 mark, according to Blockchain.com.
Market fears low activity could become a permanent issue
Last Saturday, podcaster and Bitcoin advocate Joel Valanzuela shared his sentiment on X that the drop in transactions signals a profound issue with actual network utility.
“Simply put, almost all of Bitcoin’s actual users have gone away. At all-time price highs, too,” Valanzuela wrote. “We’re facing a major crisis. Either the Bitcoin network goes bankrupt, undergoes major changes, or the asset becomes a completely custodial asset run by governments and institutions.”
Since March, mempool transaction counts have fluctuated between 3,000 and 30,000. Like Valanzuela, the community is concerned because the low figures are persistent, even though the asset has been trading above six figures in value for several months.
Bitcoin’s mempool (queue of transactions waiting to be processed) is almost completely empty. The percentage of miner revenue coming from fees (instead of inflation) is down to a fraction of a percent. 😱
Simply put, almost all of Bitcoin’s actual users have gone away. At… pic.twitter.com/Kbk3j1e8c1
— Joel Valenzuela (@TheDesertLynx) July 5, 2025
Joao Wedson, CEO of crypto analytics platform Alphractal, believes the low mempool numbers are due to a lack of retail participation.
“When mempool transactions begin to rise again, it’s a clear sign that retail is back, because the growing backlog reflects increased demand for using the network,” Wedson asserted.
Institutional inflow is not filling the gap
In its report published on July 3, Blockchain analytics firm CryptoQuant found that spot demand for Bitcoin was weakening, even though large institutions continue to acquire BTC through ETFs and treasury allocations.
The report mentioned that net Bitcoin demand contracted by roughly 895,000 BTC over the past 30 days, suggesting that buying from ETFs and companies like Strategy (MicroStrategy) is insufficient to offset declines.
Data on 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. CryptoQuant’s Bitcoin Traders’ Behavior Dominance metric shows most market participants took profits after BTC reached $110,000 in late June.
After the coin saw a pullback to $107,500, traders reportedly opened new short positions as BTC fell below $105,000, backing their bearish belief in the geopolitical differences between Israel and Iran.
“ETFs and MSTR purchases are a portion of bitcoin demand, overall demand contraction is more than offsetting these purchases,” the analysis read. “The acceleration of overall demand growth is what drives price rallies.”
The slowdown could mean institutional demand may no longer be enough to support the current price levels. Large-scale buyers may be reassessing their accumulation strategies.
The Bitcoin treasury game may not work for everybody
Speaking in a recent interview with Bloomberg, SkyBridge Capital founder Anthony Scaramucci said he was uncertain how sustainable corporate Bitcoin treasury strategies are. Scaramucci stated that while companies are copying what Michael Saylor and Strategy have been doing to make BTC purchases, the trend may not continue.
He added that Strategy may be an exception because of its diversified Bitcoin-related operations.
“Saylor’s case is different, because he’s got a couple different products going now,” Scaramucci continued, “I’m not negative on the others, because I’m too bullish on bitcoin, but I would just say as an investor, you have to look through the underlying costs associated with each one of these treasury companies.”