BIS study reveals sixfold gap in Bitcoin onchain transfer estimates

Bitcoin onchain transfer — A new study from the Bank for International Settlements has found that widely cited metrics for measuring Bitcoin’s onchain transfer values can vary by as much as sixfold depending on the methodology used.

The research, based on an analysis of 100 billion blockchain records, identified significant measurement challenges across Bitcoin, Ethereum, and Tron networks. The core issue in Bitcoin stems from how transaction outputs are counted, as ‘change’ sent back to a sender can be misconstrued as a new transfer, inflating volume estimates.

The report also critiqued market capitalization as a metric, noting that Bitcoin’s conventional market cap has at times been four times higher than its ‘realized cap’, which values coins at the price they last moved. For stablecoins, the study warned that aggregating data across blockchains like Ethereum and Tron can conflate different economic activities, such as DeFi usage versus payments.

The BIS researchers concluded that onchain indicators should be viewed as “noisy approximations rather than direct measures of economic activity.” Some analytics providers, like Visa’s Onchain Analytics dashboard powered by Allium Labs, already attempt to filter out non-economic activity to present adjusted volumes.