A Bank for International Settlements working paper has revealed significant measurement gaps in Bitcoin onchain transfer estimates. According to the study titled Hidden by complexity? Measuring stablecoin, crypto and decentralised finance ecosystems, researchers found that estimates of Bitcoin onchain transfer value can differ by as much as sixfold depending on how transaction outputs are treated. The study examined data covering 2009 through 2026, including approximately 1.3 billion transactions and 3.6 billion transaction outputs. Researchers tested three methods of calculating transfer value because Bitcoin's unspent transaction output model can return unused funds to the sender as change. As reported by the BIS study, the discrepancy stems largely from Bitcoin's transaction structure, where when users spend Bitcoin, unspent funds are often returned to the sender as change, which can be counted as another output even though it does not represent funds being transferred to another party.
The paper's upper estimate counts the value of all outputs, while an adjusted measure removes outputs sent back to the sending address. A conservative lower estimate removes identified self-transfers or subtracts the transaction's largest output under the assumption that smaller outputs represent economic transfers. As reported by the BIS study, applying different methods produced gaps of as much as sixfold in monthly estimates of Bitcoin onchain transfer value. The researchers cautioned that their lowest estimate is a conservative heuristic, noting that CoinJoin transactions can contain several change outputs and mixers create classification problems. The study found that the conventional measure of market capitalization has at times been as much as four times higher than realized capitalization, which values each coin at the price when it last moved, highlighting the extent of these measurement challenges.
The same measurement problems extend to Bitcoin's market capitalization calculations. According to the BIS analysis, standard market capitalization applies current Bitcoin price to all outstanding supply, while alternative measures remove UTXOs that have remained untouched for more than 15 years. This threshold excluded just over 1.8 million BTC from calculations, though researchers noted that inactivity cannot prove private keys have been lost. The study found that approximately 3.5 million BTC had remained dormant for more than 10 years, while nearly 24,000 BTC eventually moved after sitting dormant for over a decade. The researchers concluded that 'Metrics such as transaction volumes, market capitalisation and total value locked often suggest a degree of accuracy that is not supported by the nature of the underlying data.'
Ethereum presented unique measurement challenges as a single transaction can call several smart contracts. As reported by the BIS study, researchers examined 67.5 million deployed and active Ethereum contracts but could not place more than 54 million into technical categories. Among classified contracts, close to 12 million were proxies, 1.4 million were fungible-token contracts, and approximately 100,000 were NFT contracts. The study identified the USDT symbol across roughly 7,000 Ethereum token contracts, though only one represented Tether's official issuance. Aggregating USDT activity across blockchains conflates different use cases, masking actual utilization - Ethereum-based USDT links to DeFi activity while Tron-based USDT serves payment and store-of-value purposes. The differences were particularly stark in smart contract holdings, with the share of USDT held by smart contracts on Ethereum exceeding 20% in 2022, compared with around 1% on Tron.
The BIS report's findings carry significant implications for how regulators and analysts interpret blockchain data. As reported by the study, the discrepancy highlights that reported transfer volumes are noisy approximations rather than precise economic activity measures. The report's authors emphasize that on-chain metrics should not be treated as exact indicators, and the study may influence how regulators and index providers interpret blockchain data going forward. The findings do not affect Bitcoin's price or trading volume but signal caution for analysts and policymakers using on-chain data. The study suggests that investors and policy authorities need to consider network-specific characteristics and the limitations of aggregation methods when using on-chain metrics as a basis for judgment. The BIS urges more standardized and transparent methodologies for interpreting onchain data to improve accuracy and market understanding.
