Did Oracles account for 85% of Bitcoin network activity? Did a negative report from DappRadar lead to a surge in trading volume?

DappRadar released a report on Saturday regarding a 97% decline in Bitcoin Ordinals trading volume, with various media outlets reporting on it first. However, shortly after, data showed that nearly 85% of Bitcoin network activity was related to Ordinals and BRC-20, sparking much discussion. Is the Bitcoin network now only about Ordinals?

Ordinals Account for Nearly 85% of Bitcoin Network Activity

The birth of Bitcoin Ordinals has always been a major controversy in the community. Supporters argue for expansion of applications, while opponents claim that Ordinals are merely speculative and should not exist in the original spirit of Bitcoin.

Following the release of a report by DappRadar titled "Has Bitcoin NFT Ended?" report, the transaction volume of Ordinals reached a high point since June yesterday, seemingly contradicting the narrative.

This move has excited supporters of the protocol, who have been posting on Twitter and claiming that Ordinals' activity accounted for 84.9% of Bitcoin network activity on that day. But is this true?

After verifying the data with Dune and bitinfocharts, on August 20, there were over 411,500 Ordinals transactions, including minting and transfers, while the daily Bitcoin transaction volume was approximately 612,300, which means it actually only accounted for about 67.2%.

Bitcoin Holders Mainly Long-Term Holders

Furthermore, if Ordinals transactions account for as much as 85% of Bitcoin network activity, it may not be surprising. On-chain researcher ZK_shark responded:

Do long-term Bitcoin holders trade Bitcoin every day?

He mentioned that most Bitcoin holders are long-term holders for years, and most users may trade or transfer through other L2 networks with lower fees or faster transaction speeds, and may not use the Bitcoin network.

He also reminded that to understand the health of a blockchain ecosystem, transaction volume would be a better metric.

Current Status of Ordinals Market

However, upon examining the changes in transaction volume from May to July, the average weekly transaction volume in May was around 1.783 million per week, with a peak of 2.256 million, and in July, the average was about 1.55 million. Finally, there was a significant increase last week, reaching approximately 2.06 million.

It can be seen that the Ordinals market is still in a very early stage of high volatility, especially throughout July.

Foresight News: DappRadar Reports Full of Errors

In addition, Foresight News also expressed skepticism about the validity of DappRadar's report, mainly raising the following questions:

Incorrect Transaction Volume Data

Firstly, they cited data from CryptoSlam and Dune, explaining that the transaction volume in May and July did not decrease by 92%, but by approximately 67.5%. While still a significant decrease, the DappRadar report is inaccurate and significantly discrepant from the facts.

Comparing with Ethereum is Meaningless

Furthermore, the report mentioned:

"While Ordinals bring innovation, Ethereum and Polygon have longer-standing reputations and extensive applications in the NFT space, making them less susceptible to market volatility."

In fact, it is not just Ordinals that are facing pressure and challenges; Ethereum NFT market trading volume has dropped by 89% in the past six months, not to mention the floor prices of many blue-chip NFTs.

Foresight News also stated that the decline in transaction volume is common during the NFT hype cycle, and explained that the overall downturn in the crypto market will affect all assets, including Bitcoin.