Bitcoin Velocity Falls to 10-Year Low as ETF Adoption Rises
Bitcoin velocity has fallen to its lowest level in ten years. Over 70% of BTC remains unmoved for more than a year. This decline marks a shift from transactional use to store-of-value behavior. Since early 2024, institutional adoption has driven spot Bitcoin ETFs to hold 1.298 million BTC (6.2% of supply). Total institutional reserves, including corporate treasuries and funds, approach 2.55 million BTC (12.8%). Off-chain layers show ongoing economic activity. The Lightning Network’s public capacity has exceeded 5,000 BTC, up nearly 400% since 2020. Wrapped Bitcoin (WBTC) supply on Ethereum grew 34% in H1 2025. Lower Bitcoin velocity boosts scarcity but cuts on-chain transactions and miner fee revenue after the 2024 halving. Traders should monitor Bitcoin velocity, ETF inflows, Lightning adoption, and miner fees. A rebound in velocity could signal renewed transaction demand, while persistently low velocity cements Bitcoin’s macro collateral role.
Bullish
Strong ETF inflows and growing store-of-value behavior point to bullish momentum. In the short term, rising institutional adoption via spot Bitcoin ETFs has locked up supply, pushing prices higher. Persistently low Bitcoin velocity enhances scarcity, further underpinning price support. In the long term, reduced miner fee revenue after the halving may raise network security concerns, potentially increasing volatility. Overall, the dominant effect of ETF-driven demand and scarcity suggests a bullish outlook for BTC.