Bitcoin Chain Speed – The frequency at which coins travel is the lowest in 10 years. For some, it’s the red flag: Has Bitcoin lost momentum? Is it still in use?
In fact, slowing speeds could be the clearest signal that Bitcoin is mature rather than stagnant. Instead of circulating like cash, Bitcoin is increasingly held like gold.
Shifting functions
In traditional economics, speed refers to how often money changes hands. It is a proxy for economic activity. In the case of Bitcoin, it tracks how often BTC passes through the chain. In the early days of Bitcoin, coins moved frequently as traders, early adopters and enthusiasts tested their use cases. Transactional activity surged during the run of Major Bull, like in 2013, 2017, and 2021, with BTC swapping quickly between wallets and exchanges.
Today, that has changed. Over 70% of BTC have not been running for more than a year. Transaction churn is late. At face value, this may seem to reduce use. But it reflects something else: belief. Bitcoin is not only treated as a short-term currency, but also as a long-term asset. And that shift is driven primarily by the institutions.
Adoptions at facilities strengthen supply
Institutional holdings have skyrocketed since the launch of the US Spot Bitcoin ETF in 2024. As of mid-2025, Spot ETFs had exceeded 1,298 million BTC, roughly 6.2% of total circulation supply. When including the Ministry of Finance, private companies and investment funds, the total facility holdings approach 2.55 million BTC, about 12.8% of all Bitcoin in circulation. These assets remain primarily static and are stored in cold wallets as part of a long-term strategy. Companies like Strategy and Tesla are not spending Bitcoin. They hold it as a strategic reserve.
It’s bullish for rarity and price. But it also slows down. Fewer coins are circulating and fewer transactions occur on-chain.
Off-chain usage is increasing and it is difficult to see
It is important to note that on-chain speeds do not capture all of Bitcoin’s economic activity.
On-chain speed tells only part of the story. More and more, the true economic activity of Bitcoin is happening from the basics and beyond traditional measurements.
Take Lightning Network, Bitcoin’s Layer 2 Scaling Solution that allows for fast, low-cost payments that bypass the main chain completely. From streaming micropayments to cross-border transfers, Lightning enables Bitcoin in daily scenarios, but that transaction is not visible in speed metrics. As of mid-2025, public lightning capacity was above 5,000 BTC, reflecting an increase of nearly 400% since 2020. The growth and institutional experiments of private channels suggest that real numbers are much higher.
Similarly, wrap bitcoin
It allows BTC to cycle through Ethereum and other chains, fueled by the Defi protocol and tokenize finance. In the first half of 2025 alone, WBTC supply rose 34%. This is a clear signal that Bitcoin is unfolding rather than dormant.
And there’s custody. Facility wallets, ETF cold storage and multisig financial tools allow businesses to keep BTC secure, but often they can hold it without moving. These coins may be economically important, but they do not contribute anything to chain speed.
In short, Bitcoin is more likely to be active than it appears, and is happening outside of traditional speed metrics. The utility is moving towards new layers and platform payment rails, smart contract systems and yield strategies. As Bitcoin evolves into a multi-layered financial system, new ways to measure its momentum may be needed. A slower on-chain speed does not necessarily mean slower use. In fact, that might mean we are looking at the wrong place.
Tradeoffs behind slow speeds
Slow speed reflects beliefs and long-term retention, but also presents challenges. Less transactions on the chain will result in lower miners’ fees. Concerns will rise after half of 2024, and block rewards will be halved. Bitcoin’s long-term security model relies on a healthy rate market, which relies on consistent economic activity.
There is also the issue of perception. Networks where coins rarely move are similar to static safes rather than dynamic markets. It may strengthen the “digital gold” paper, but weakens the vision of Bitcoin as usable money.
This is the tension in core design. Bitcoin aims to become both a valuable repository (digital gold) and a medium of exchange (peer to peer cash). However, these roles do not always match. Speed is a measure of its push and pull, and this ongoing struggle between preservation and utilities, and how Bitcoin shapes its role in not only its usage patterns, but also its role in the broader financial system.
Signs of maturity
Ultimately, slower speeds do not mean that you use less Bitcoin. That means it is used differently. As Bitcoin gains value, people tend to save it rather than use it. As adoptions grow, infrastructure moves in chains. And once the institutions come in, their strategy is focused on conservation rather than distribution. The Bitcoin network is evolving. The speed has not disappeared. Reformed by a new layer of user base changes and new economic activity, it is silent.
If the speed is re-entered, it may mark a revival of transaction usage. More spending, more movement, more retail involvement. If it remains low, it suggests the role of Bitcoin when macro collateral is firmly rooted. Either way, Velocity offers a window into the future of Bitcoin. Not as a coin to spend, but as an asset to build.
