Your essential insights for January twenty-ninth, twenty twenty-six.
By BlockSonic (All times Eastern Time unless indicated otherwise.)
You may have heard the claim that Bitcoin serves a dual purpose: as a digital token reminiscent of gold, with a finite supply of twenty-one million, and as a decentralized technology enabling seamless money transfer without intermediaries.
Yet, here we stand, witnessing Bitcoin falter in both roles. As a store of value, it has struggled against traditional precious metals like gold and silver, revealing a narrative of underperformance that many have documented.
The situation grows even more concerning when we observe the decline in on-chain activity, reminiscent of levels last seen in mid-2025. For example, the thirty-day average of daily confirmed payments processed on the Bitcoin blockchain has plummeted to seven hundred forty-eight thousand three hundred sixty-eight, the lowest figure since mid-July, according to Blockchain.com. Just months prior, we witnessed a peak exceeding eight hundred eighty-four thousand in September. A payment, in this context, indicates that recipients receive funds through an on-chain transaction.
You might wonder how this decline in activity affects the network. The monthly average of confirmed transactions tells a similar story, highlighting a downturn in network usage. The mempool, or memory pool, where unconfirmed transactions await miner verification, has also stagnated. Currently, it sits with just a few thousand unconfirmed transactions each day, a trend persisting since late twenty twenty-five.
"On-chain signals indicate a market in consolidation rather than accumulation. Network activity is waning, and this reduced conviction from both institutional and retail investors is evident in the drop in active addresses and transaction volumes," stated Vikram Subburaj, Chief Executive Officer of Giottus exchange, in a recent email.
You see, the price of a token is intrinsically linked to the active user adoption of its underlying network. This recent decline in activity offers a partial explanation for Bitcoin's lackluster price performance in recent months.
As the leading cryptocurrency by market value, Bitcoin has retreated to eighty-seven thousand five hundred dollars after reaching highs above ninety thousand dollars ahead of the Federal Reserve meeting on Wednesday. The central bank opted to maintain interest rates, as anticipated. However, the accompanying policy statement and Chairman Jerome Powell's press conference hinted at a more cautious stance on potential rate cuts in the near future.
With Bitcoin's downward trajectory, notable sectors from earlier this week have now plunged into the red. For instance, the CoinDesk Memecoin Index has experienced a decrease of more than nine percent over the past twenty-four hours. Additionally, the Metaverse Select and Culture and Entertainment indexes have both dropped over five percent.
In contrast, gold-backed tokens such as PAXG and XAUT have seen gains, buoyed by the ongoing rise in spot gold prices. Worldcoin's WLD has also surged by five percent.
Turning to traditional markets, we observe that oil prices have climbed to four-month highs across the Atlantic, potentially reigniting inflationary pressures within the global economy. This renewed energy-led inflation could complicate matters for the Federal Reserve in future rate decisions.
As we reflect on the evolving narrative surrounding Bitcoin and its role in our financial landscape, we invite you to pause and consider: What does sound money truly mean in this context?
We encourage you to share your thoughts and insights with us, as we continue to explore the profound implications of these developments together.