A study by the Bank for International Settlements revealed that estimates of Bitcoin's on-chain transfer values can vary by as much as six times depending on the measurement methodology used.
The discrepancy stems primarily from Bitcoin's transaction structure. When users spend Bitcoin, unspent funds are frequently returned to the sender as a change output. Some measurement methods count this change as another transfer, even though it does not represent funds moving to a new party.
BIS researchers analyzed over 100 billion blockchain records across Bitcoin, Ethereum, and Tron. Their findings indicated that conventional metrics such as transaction volumes, market capitalization, and total value locked often imply a degree of accuracy not supported by the underlying data structure.
The measurement problem extends to Bitcoin's market capitalization. The study found that the conventionally calculated market capitalization has, at times, been four times higher than the realized capitalization, which values each Bitcoin at the price it last moved.
Ethereum presented separate measurement complexities due to its extensive use of smart contracts. The study examined approximately 67.5 million active contracts on Ethereum, but about 54 million of these could not be categorized using the study's classifications, obscuring their specific function and economic impact.
Stablecoin activity measurement poses a challenge because the same asset serves different purposes across blockchains. USDT on Ethereum was observed to be more closely associated with DeFi activity—lending protocols and decentralized exchanges—while USDT on Tron was more frequently linked to payment-like transactions and store-of-value functions.
The differences were pronounced in smart contract holdings. In 2022, the share of USDT held by smart contracts on Ethereum surpassed 20 percent. On Tron, this figure was approximately 1 percent.
Aggregating USDT activity across different blockchains conflates distinct types of economic activity, obscuring actual stablecoin usage patterns and potentially leading to misinterpretations of liquidity and utility.
The BIS researchers concluded that on-chain indicators should be treated as "noisy approximations rather than direct measures of economic activity." Some analytics providers have begun differentiating between raw blockchain activity and adjusted measures. Visa's Onchain Analytics dashboard, powered by Allium Labs data, displays both total and adjusted stablecoin transaction volumes to remove internal transfers.
