05 Sep 2022

On-chain activity increases, but is still extremely low

We see a significant increase in Bitcoin's on-chain activity after the drowsy August, but it's still at very low levels historically.
As we pointed out last week, Bitcoin's on-chain activity was very low at the end of August. Over the past seven days, we have seen an upswing in on-chain activity, as indicated by a surge in active addresses from the bottom of 880k one week ago to 925k.With more users making on-chain transactions, we also see a 23% increase in the daily transaction volume. This higher demand for transacting has naturally led to a 32% surge in daily fees, now at $277k.Even after this massive increase, the daily transaction fees are still close to the lowest since May 2020. This reminds us that although on-chain activity has been increasing lately, it's still very low historically.
Screenshot 2022-09-06 092214
Source: Bytetree
Bitcoin's hashrate continues to tick upwards after a summer without growth. The 7-day average hashrate is now at 225 EH/s, and only a 3% increase is required to break the all-time high of 231 EH/s.The reason behind the hashrate surge is likely that American miners are coming back online after shutting off their machines as a response to surging electricity prices following summer heatwaves.Last week, all this hashrate coming online led to some of the highest block production rates observed, at 6.64 blocks per hour. The Bitcoin network responded by increasing the difficulty by 9.3% - the second-biggest difficulty increase in 2022. This difficulty increase has pushed down the block production rate towards the target of 6, but it's still slightly above at 6.2.
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