BIS Report: Significant Gap in Bitcoin On-Chain Transfer Valuations

TechFlow reports on September 16 that, according to Cointelegraph, the latest research from the Bank for International Settlements (BIS) indicates that currently widely adopted cryptocurrency metrics may not accurately reflect true economic activity. The study finds that estimates of Bitcoin on-chain transaction values vary significantly across different measurement methods, with discrepancies of up to sixfold. This data gap primarily concerns the scale of on-chain transfers, distinct from asset trading volumes within exchanges.

The report attributes this divergence primarily to Bitcoin’s specific transaction structure. When a user initiates a transfer that involves a partial balance, the remaining funds are typically returned as “change” to a new address owned by the sender. If algorithms treat these outputs as payments to a third party, it results in the value of the same transaction being artificially inflated or double-counted.

Beyond transfer valuation, the study’s findings also extend to Bitcoin’s market capitalization metrics. Data indicates that traditional market cap measurements can exceed actual realized capitalization by up to four times during certain periods. The research team warns that commonly used indicators such as trading volume, total market cap, and value locked often create a false sense of precision, obscuring the inherent limitations of the underlying data.