• CryptoQuant’s Bitcoin Network Activity Index has gone up recently, indicating an increase in overall activity on the Bitcoin network.
• The reason for this surge is the rise of Ordinals NFTs, which are directly inscribed on the blockchain itself and inflate its block size.
• This increased activity is particularly noteworthy since it marks the highest level since May 2021.
CryptoQuant’s Bitcoin Network Activity Spikes
Network Activity Index
CryptoQuant, an on-chain analytics firm, has reported a significant uptick in activity on the BTC network. To measure this activity, CryptoQuant uses its “network activity index,” which evaluates four metrics: total number of active addresses; number of transactions; Unspent Transaction Output (UTXO) count; and block size. The graph below shows how the value of CryptoQuant’s network activity index has changed over the last few years:
Rise of NFTs
The recent surge in Bitcoin network activity can be attributed to increasing popularity of Non-Fungible Tokens (NFTs). These tokens are made possible through a protocol called “Ordinals” which stores images directly onto the chain using Taproot transactions. As these NFTs are written directly onto the blockchain, they also inflate its block size – resulting in a higher value for CryptoQuant’s network activity index.
This boost in BTC network activity has resulted in it reaching its highest level since May 2021. This milestone indicates that despite some bearish sentiment around Bitcoin lately, there continues to be strong demand for crypto assets and services that utilize blockchain technology like NFTs.
Bitcoin’s recent surge in network activity can be attributed to growing popularity of Ordinals NFTs which have been inscribed directly on the chain and have caused an increase in block sizes – thus driving up CryptoQuant’s “network activity index.” This uptick marks an all-time high since May 2021 and is evidence that there remains strong demand for crypto services utilizing blockchain technology like NFTs despite bearish sentiment around BTC lately.
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