The on-chain activity of the Ethereum (ETH) ecosystem is going through a higher moment than that of the Bitcoin (BTC) network. After a few days of parity, the network created by Vitalik Buterin surpassed that of Satoshi Nakamoto in the number of new active addresses.
Ethereum reached almost 282 million unique active addresses on its network in August 2024, which implied a 2% monthly increase in this measurement. n contrast, this metric in Bitcoin suffered a slowdown and grew by 1%, recording 54 million unique active addresses in the last month.
While during the last days of August the trend had been equalized, during the first days of September it turned back in favor of Ethereum. The prevalence in this metric by the market towards ETH at the expense of BTC has been gaining strength since April 2024.
This circumstance reflects a fact rarely seen in the history of these cryptoassets, since, over the years, BTC has been solidly above ETH in this metric.
Since April 2024, the number of active addresses on ETH has grown at the expense of its BTC counterpart. Source: Bit Info Charts.
In turn, this increase in user interest in the Ethereum network (or its decrease in the Bitcoin network) is reflected in the number of daily transactions. In this case, we should not limit ourselves to the aforementioned period of 2024, but ETH has far exceeded BTC in the number of daily transactions since even before then.
The following image taken from the Artemis platform describes what was explained in the previous paragraph. The blue line represents the number of daily transactions and the orange line represents the number of Bitcoin transactions.
Historical daily transaction volume on the Ethereum and Bitcoin networks. Source: Artemis.
What is the reason for Ethereum's “superiority” over Bitcoin?
It should be noted that this type of event is a response to multifactorial issues, and it would be inappropriate to focus on a single reason to explain the momentary preference for one network over another. A number of reasons can be cited to try to answer the question posed.
Firstly, according to the on-chain analytics platform Santiment, the increased use of stablecoins on the Ethereum chain would be one of the reasons for the disparity between Bitcoin and Ethereum. The total number of USDT holders reached 6 million users on Ethereum. This figure represents a 4% increase compared to the last three months.
The original Bitcoin network, on the other hand, does not support stablecoin transactions, forcing users to opt for other applications that are less familiar and less practical for them. For example, the Omni Layer network, a smart contract platform built on Bitcoin.
Secondly, during the last months of 2024, a noticeable increase in Ethereum's L2 networks (Arbitrum and Base especially) has been observed. This increase coincides with the period when ETH's unique active wallets began to surpass BTC's (from April 2024 to the present).
This growth of L2s, which led to a huge user attraction, is based on the low transaction costs offered by these networks. So much so that the number of active users and daily transactions on L2 surpassed that of Ethereum's L1.
Finally, and in line with what was stated above, throughout 2024 the number of Ordinals registrations on the Bitcoin network has decreased significantly, according to The Block Data, from January 2024 to date.
Chart showing the decline in Ordinals registrations in Bitcoin. Source: The Block Data.
Ordinals, on the other hand, is a protocol that allows for the creation, tracking and storage of digital assets such as NFTs on the Bitcoin blockchain. This recent development brought a new functionality to the network, traditionally focused on being a payment system or store of value.
Ordinal transactions were presumably a strong reason for Bitcoin wallet activation. However, these and other registrations are at their lowest point of the year in terms of transactions.
