A recent study by the Bank for International Settlements revealed that widely used crypto metrics can obscure economic activity, citing measurement difficulties across Bitcoin, Ethereum and stablecoins.
Researchers found estimates of Bitcoin on-chain transfer values can vary by as much as sixfold. The discrepancy stems from differing measurement methods, particularly how change outputs and funds returned to the sender are treated within transactions. Bitcoin's transaction structure returns unspent funds to the sender as change, which can be counted as a new output despite not representing a transfer to another party.
The BIS study, published Sept. 15, analyzed 100 billion blockchain records across Bitcoin, Ethereum and Tron. The measurement problem also extends to Bitcoin's market capitalization. The study found that conventional market capitalization has at times been up to four times higher than realized capitalization, which values each coin at the price it last moved.
Ethereum presented a separate set of measurement challenges primarily due to the proliferation of smart contracts. Out of approximately 67.5 million active contracts examined, about 54 million could not be categorized using the classifications established in the study.
Interpreting stablecoin activity faces additional hurdles, as the same asset can serve distinct purposes across different blockchains. USDT on Ethereum was more closely linked to DeFi activity, while USDT on Tron was predominantly associated with payment-like and store-of-value functions. In 2022, the share of USDT held by smart contracts on Ethereum exceeded 20 percent, compared with roughly one percent on Tron. Aggregating USDT activity across blockchains conflates disparate economic activities and obscures actual stablecoin usage, according to the researchers.
The BIS researchers concluded that on-chain indicators should be treated as "noisy approximations rather than direct measures of economic activity." Metrics such as transaction volumes, market capitalization and total value locked often suggest a level of accuracy not supported by the underlying data.
Some analytics providers have already moved to address these issues. Visa's Onchain Analytics dashboard, powered by data from Allium Labs, provides both total and adjusted stablecoin transaction volumes.
