Researchers at the Bank for International Settlements (BIS), an international organization serving central banks and financial institutions worldwide, have reported that estimates for the value of onchain Bitcoin transfers can vary by as much as six times depending on how transactions are measured.
Methodological differences drive wide transfer value gaps
The BIS study focused on measuring Bitcoin activity recorded on the blockchain, rather than trading volumes on cryptocurrency exchanges. The researchers identified a sixfold discrepancy in onchain transfer value estimates, which they linked to the differing methodologies used to classify transaction components—particularly the treatment of change outputs and transfers sent back to the sender.
Bitcoin’s transaction structure is a primary source of the variance. When Bitcoin is spent in a transaction, leftover funds, known as change, are typically sent back to the sender as a separate output. Some measurement approaches count these change outputs as additional transfers, even though they do not represent funds moving to a third party.
Metrics such as transaction volumes, market capitalization, and total value locked often suggest a degree of accuracy that is not supported by the nature of the underlying data, according to the BIS researchers.
The implications of measurement differences extend beyond transfer values. The researchers noted that the commonly used market capitalization metric for Bitcoin has, at times, been up to four times higher than realized capitalization, a metric that values each coin based on its last movement in the network.
For their analysis, the BIS team examined around 100 billion blockchain records across Bitcoin, Ethereum, and Tron, determining that similar discrepancies and methodological challenges exist throughout the crypto ecosystem.
Ethereum and stablecoin measurement complexities
Ethereum, a leading smart contract platform, presented its own set of measurement difficulties. Of approximately 67.5 million active Ethereum smart contracts reviewed in the study, only a minority could be accurately categorized, highlighting the complexity of classifying onchain activity across decentralized applications.
Stablecoins such as USDT revealed further divergences depending on network use. The study found that USDT on Ethereum was predominantly used in decentralized finance (DeFi) activities, while on Tron, the token was more often used for payments and as a store of value.
Stark differences showed up in contract holdings as well. In 2022, more than 20% of USDT on Ethereum was held by smart contracts, compared with just about 1% on Tron. Due to these differing network use cases, the researchers cautioned that aggregating USDT activity across blockchains can obscure underlying economic activity and conflate distinct transaction types.
The BIS team concluded that onchain indicators should be considered noisy approximations rather than precise reflections of economic activity.
Mini dictionary: Tron, launched in 2017, is a blockchain platform specializing in decentralized applications and smart contracts, known for its high throughput and low transaction costs. It is widely used for stablecoin transactions, particularly USDT.
| Network | USDT held by smart contracts (2022) | Primary use case |
|---|---|---|
| Ethereum | Over 20% | DeFi activity |
| Tron | Approx. 1% | Payments, store of value |
Industry response: Visa’s adjustment of stablecoin metrics
Some analytics vendors are already addressing the measurement issues highlighted in the BIS report. Visa, a global payments technology company, operates the Onchain Analytics dashboard, which is powered by data provider Allium Labs. This dashboard offers both total and adjusted stablecoin transaction volumes.
Visa has stated that its adjusted methodology is designed to filter out misleading factors such as high-frequency trading, bot activity, transaction routing across bridges, and internal transfers within exchanges to better represent actual economic use.
As of the past 30 days tracked by the dashboard, total stablecoin transactions on monitored networks amounted to $6.4 trillion. However, after using Visa’s adjusted methodology, the reported volume dropped sharply to $313.1 billion, highlighting the dramatic effect of different measurement criteria.
| Metric | Volume (last 30 days) |
|---|---|
| Total stablecoin transaction volume | $6.4 trillion |
| Adjusted stablecoin transaction volume | $313.1 billion |
