The on-chain velocity of bitcoin-often how coins go on-in the climb of the Sasa. For some, this is a red flag: has bitcoin lost speed? Is it still being used?
In fact, the fall velocity can still be a clear indication that bitcoin is maturing, not stable. Instead of walking like cash, bitcoin is being held fast like gold.
A change in the ceremony
In traditional economics, velocity means how often money changes; It is a proxy for economic activity. For bitcoin, it tracks how many times the BTC is transacted on-chant. In the early days of bitcoin, coins often moved as traders, early adoptives and enthusiasts, and tested cases of its use. During the Major Bull Run, in 2013, 2017 and 2021, BTC between wallets and exchanges quickly flows.
Today, it has changed. More than 70% of BTCs have not gone in a year. The churning of the transaction has slowed down. At the inscribed value, it may look like a decline in use. But this indicates something else: firm belief. Bitcoin is considered as a long -term property, not just as a short -term currency. And this change is largely operated by institutions.
Institutional adoption supply supply
Since the launch of the US spot bitcoin ETF in 2024, institutional holdings have increased. By mid -2025, the spot ETF is more than 1.298 million BTC, about 6.2% of the total circulating supply. When corporate treasury, private companies and investment funds are included, about 12.8% of the total institutional holdings contains about 12.8% of all bitcoins. These assets are largely stable, stored in cold purse as part of long -term strategies. Firms like strategy and Tesla are not spending their bitcoins; They are holding it as a strategic reserve.
This is a decrease and a boom for price. But it also reduces velocity: less coins are circulating, low transactions are on-chains.
The use of off-chain is increasing and is difficult to see
It is important to note that on-chain velocity catchs all economic activities of bitcoin.
The on-chain velocity tells only part of the story. Fast, Bitcoin is having real economic activity Close The base layer, and out of traditional measurements.
Take Lightning Network, the layer -2 scaling solution of bitcoin that enables the main range to bypass fast, low cost payments. From micropresses streaming to transmission of border, lightening bitcoins make the bitcoin usable in everyday landscapes, but its transactions do not appear in the veg metrics. By mid -2025, public power capacity has crossed 5,000 BTC, showing an increase of about 400% since 2020. Private channel development and institutional experiment shows that the actual number is very high.
Similarly, wrapped bitcoin
Enabled to transmit BTC to airs and other chains, DEFI protocols and tokens fuel finance. In the first half of 2025 alone, the supply of WBTC increased by 34%, a clear indication that bitcoin is being deployed, not inactive.
And then detention is: institutional wallets, ETF cold storage, and multicing treasury tools allow the firms to keep BTC safely, but often without transferring it. These coins can be financially important, yet they do not contribute anything to the on-chain velocity.
In short, bitcoin is more active than being possible, it is just happening outside the traditional velocity matrix. Its utility is transferred to new layers and platforms- payment rail, smart contract system, yield strategies, none of which are registered in traditional velocity models. As bitcoin develops in a multi-layer monetary system, we may require new methods to measure its speed. The chain-chain velocity does not mean that the use is slowing down. In fact, this may mean that we are looking at the wrong place.
Business closed behind low velocity
While slow velocity refers to strong belief and long -term holdings, it also presents a challenge. Low on-chain transactions mean low fees for miners: a growing anxiety after 2024, which cut the block rewards in half. The long -term safety model of bitcoin depends on a healthy fee market, which in turn depends on continuous economic activity.
There is also a question of perception. A network where coins rarely move, can meet a stable chest rather than a dynamic market. It can strengthen the “digital gold” thesis, but weakens the vision of bitcoin as usable money.
This core design tension is: Bitcoin aims to store both values (Digital gold) And a medium of exchange (Peer to Peer Cash) But those roles are not always align. The velocity is the measurement of that push and the bridge, it will not only shape the use pattern, but how the bitcoin navigate between protection and utility, and its role in a comprehensive financial system.
Indication of maturity
Finally, falling velocity does not mean that bitcoin is being used less. This means that it is being used in different ways. As the value of bitcoin, people are more inclined to save it than spending it. As adoption increases, the infrastructure is off-chain. And as soon as institutions enter, their strategies are not centers on conservation, not circulation. Bitcoin network is developing. The velocity is not missing; It is becoming silent, a changing user is renovated by the base and new layers of economic activity.
If the velocity rests again, it can mark the revival of the use of transactions; More expenses, more agitation, more retail participation. If it is low, it suggests that the macro collateral firm is taking root as the role of bitcoin. In any way, the velocity provides a window in the future of bitcoin. Not as a coin to spend, but as a property to manufacture.
