Hype Fades, Activity Slows: Bitcoin Protocol Usage Hits 18-Month Low

Bitcoin's on-chain activity has hit an 18-month low, raising fresh questions about the longevity of recent experiments like Runes and Ordinals. Once hailed as Bitcoin’s answer to Ethereum-style applications, these native protocols briefly turned the network into a hotspot for NFTs and meme tokens. But as the hype dies down, so too does the traffic.

According to The Block, Bitcoin’s daily transactions recently fell to 316,000, down sharply from the 700,000–750,000 peak seen during the mid-2024 Runes frenzy. The 7-day moving average confirms a sustained decline: after the speculative boom surrounding Runes and Ordinals, activity gradually dropped below 500,000 by early 2025 and now hovers near 350,000. This 18-month low signals waning interest in Bitcoin-native protocols and a broader shift from hype-fueled congestion to network stagnation.

From Speculation to Settlement: Bitcoin Transactions Shift Back to Basics

Bitcoin transactions generally fall into two categories: native BTC transfers and protocol-level transactions. Native transfers, referring to the peer-to-peer movements of Bitcoin between wallets, represent the most fundamental and enduring use of the network. Protocol-level transactions, on the other hand, are generated by applications like Runes, Ordinals, and BRC-20 (an earlier experimental token standard). These rely on Bitcoin’s UTXO model and Taproot upgrade to embed metadata into transactions, resulting in spikes in transaction volume during periods of high adoption.

The chart illustrates a clear decline in Bitcoin transaction volume and a shift in transaction types. Bitcoin-native protocols such as Runes and BRC-20 saw a surge in activity following their launches, with Runes briefly dominating transaction volume in mid-2024. However, this momentum proved short-lived, as usage declined sharply within a few months.

As the hype subsided, Bitcoin’s transaction landscape began reverting to its core function: peer-to-peer BTC transfers. These now make up the majority of on-chain activity, reinforcing Bitcoin’s role as a decentralized value transfer network rather than a platform for token experiments. With fewer speculative transactions, network congestion has eased significantly. This is evident in the drop in average transaction fees, which have fallen below $1.50, down from the $128 peak seen during the height of Runes activity.

The Rise Before the Fall: Ordinals’ Golden Era and Breakout Successes

Before the Ordinals market cooled, a few standout collections exemplified its early boom. NodeMonkes, a fully on-chain pixel-art project launched in December 2023 via Dutch auction at 0.03 BTC, quickly ascended in status. By March 2024, its floor price surged to 0.83 BTC ($55,890). As a 10,000-piece collection that capitalized on first-mover sentiment, NodeMonkes distinguished itself by both scarcity and cultural resonance in the Bitcoin NFT space.

Similarly, Taproot Wizards, created by Udi Wertheimer and Eric Wall, epitomized exclusivity by limiting its supply to just 2,121 Ordinals. Launched in March 2025, the minting process demanded dedication. Whitelisted supporters paid 0.2 BTC (~$16,000), and the inscription launch in March further confirmed success despite high gas costs. This carefully controlled release, complete with quests and a Dutch auction, transformed minting into a badge of community commitment. High mint costs didn't stop collectors, boosting Taproot Wizards' reputation and showing how Ordinals can create value through blockchain authenticity.

Ordinals Lose Their Shine: Blue Chips Slide as Market Cools

The Ordinals ecosystem has taken a pronounced hit in recent months, with key blue-chip collections notably retracing from their peaks. NodeMonkes, which once commanded a floor price approaching 1 BTC, has plunged to 0.024 BTC, showing a 36% decline over the past month and now below their mint price of 0.03 BTC. Despite recording 11.3 BTC in total volume and 356 sales on Magic Eden, this steep floor drop signals weakening demand and mounting sell-side pressure. Taproot Wizards is also showing signs of fatigue. Its floor price has fallen 11.1% in the same period to around 0.16 BTC, with 12.01 BTC in monthly sales volume.

A recent Grayscale analysis highlights that while Ordinals tap into Bitcoin’s permanence and decentralization by embedding inscriptions directly on-chain without relying on Layer 2s, they still face adoption hurdles. Unlike Ethereum’s mature ERC-721 ecosystem, which offers richer programmability and has a larger ecosystem, Bitcoin’s inscriptions are immutable, non-programmable, and fully on-chain.

Currently, Ordinals are limited by technical complexity, varying wallet support, and Bitcoin’s blockspace constraints. The future development of more user-friendly infrastructure and utility-focused communities will likely play a key role in determining whether Ordinals evolve into a lasting component of the Bitcoin network.

Bitcoin’s Network Was on Fire: The Runes Mania

The launch of the Runes protocol in April 2024, created by Casey Rodarmor, who also developed Ordinals, marked the peak of Bitcoin’s experimental phase. Runes quickly gained traction for enabling fungible tokens using the OP_RETURN field, avoiding the bloat of earlier BRC-20 standards. Shortly after the halving, minters had already poured 78.6 BTC (approximately $4.95 million) into fees to claim the most sought-after tokens.

This speculative surge displaced up to 81% of regular Bitcoin transactions in June 2024. Projects like FEHU, DOG•GO•TO•THE•MOON, and RSIC GENESIS were deployed at absurd costs, while community hype drove a short-term ecosystem boom. Several marketplaces, such as Unisat, Magic Eden, and OKX, rushed to support Rune tokens, each capturing a slice of the hype.

Speculative Momentum Fades, Leaving Runes at a Crossroads

Despite the explosive start, Runes couldn’t sustain momentum. On June 5, OKX officially removed support for Rune trading from its marketplace, a decision that raised concerns within the community about the protocol’s long-term viability. While Unisat and Magic Eden continue to support Rune tokens, activity on both platforms has noticeably declined.

From Magic Eden, the Rune market shows clear signs of fatigue. Despite strong early narratives and community interest, price corrections and low volumes suggest that speculative hype is no longer driving the ecosystem. Making matters worse, the process of minting Runes remains technically complex. Unlike the more streamlined minting experiences on chains like Solana or Ethereum, creating a Rune typically involves monitoring the mempool, estimating block times, and carefully calculating minting fees. Errors in this process can lead to overpayment or failed transactions, which may present barriers to entry for new participants. Without further development in utility, more accessible tooling, or additional liquidity, the growth potential of many Rune assets may be limited.

The OP_RETURN Update: A Turning Point?

Interestingly, this network cooldown coincides with Bitcoin Core’s upcoming v30 update planned for October 2025, which will expand the OP_RETURN limit from 80 bytes to nearly 4MB. This change makes protocols like Runes more scalable and expressive—supporting larger data payloads without bloating blockspace.

While the timing is late, it raises the question: Could this revive interest in Runes assets? If infrastructure catches up and fairer distribution models emerge, we might see a more sustainable second wave, where it is less driven by hype, more by use.

Alkanes: A New Challenger in Bitcoin's Protocol Arena

As Runes and Ordinals lose steam, a new contender has entered the Bitcoin metaprotocol arena: Alkanes. Developed by Oylwallet, a team with ties to well-known crypto figure Arthur Hayes. Alkanes introduces a WASM-based smart contract layer directly on Bitcoin, unlocking more sophisticated use cases like automated market makers (AMMs), lending platforms, and NFTs. In just three months, it has generated 11.5 BTC in gas fees, already outpacing Ordinals in the same timeframe, according to an excerpt from Messari Monthly: June 2025.

Alkanes differentiates itself by bringing full programmability and DeFi capabilities to Bitcoin via a WASM-based smart contract environment built on Ordinals or Runes mechanics. While most assets are still traded via PSBT marketplaces today, the protocol is gearing up to launch its native OYL-AMM, a smart contract–powered liquidity exchange that could shift Bitcoin asset trading toward automated, on-chain pools and away from manual order matching.

However, its long‑term success hinges on real DeFi adoption, sustainable tooling, and actual demand, just like earlier Bitcoin-native experiments (Ordinals, Runes). Until the AMM goes live and traction deepens, it remains a speculative project.

Looking Forward

The drop in network activity signals a fading interest in Bitcoin-native experiments like Runes and Ordinals. Once touted as Bitcoin’s entry into Ethereum-style applications, these protocols briefly transformed the network into a hub for meme coins and digital collectibles. However, with their momentum now stalled, Bitcoin appears to be reverting to its core use case, which is the settlement of native BTC transfers.

The continued low transaction count, despite strong price performance, suggests a cooling of speculative on-chain behavior and a return to fundamentals. For miners, this may raise concerns about long-term fee revenue, especially as block rewards continue to diminish.