A Bank for International Settlements study identified substantial measurement challenges across Bitcoin, Ethereum and stablecoins, concluding that widely used on-chain metrics can misrepresent economic activity.
On-chain Bitcoin transfer values can differ by as much as six times depending on the measurement methodology applied. The core discrepancy lies in Bitcoin's transaction structure: when users spend Bitcoin, unspent funds are frequently returned to the sender as a change output. These change outputs are often counted as additional transfers despite not representing movement to a distinct party.
Measurement problems also extend to Bitcoin's market capitalization. The BIS researchers found that conventional market cap has, at times, been four times higher than realized capitalization, which values each Bitcoin at the price it held when it last moved on-chain.
The study analyzed over 100 billion blockchain records across Bitcoin, Ethereum and Tron. It found similar measurement complexities are widespread throughout the crypto ecosystem.
Ethereum presented distinct challenges due to extensive smart contract use. Out of approximately 67.5 million active smart contracts examined, about 54 million could not be categorized using the study's established classifications.
Stablecoin activity poses additional challenges because the same asset can serve different functions across blockchains. USDT on Ethereum was found to be more closely associated with DeFi activity, while USDT on Tron was primarily linked to payment transactions and store-of-value use cases. In 2022, USDT held by smart contracts on Ethereum exceeded 20 percent of total holdings, while on Tron the figure was around 1 percent.
Aggregating stablecoin activity across blockchains conflates different forms of economic activity and obscures actual utilization patterns.
The BIS researchers concluded that all on-chain indicators should be treated as noisy approximations rather than precise measurements of economic activity. Some analytics providers already incorporate adjustments to differentiate between raw blockchain activity and measures intended to reflect actual economic transfers. Visa's Onchain Analytics dashboard, which uses data from Allium Labs, provides both total and adjusted stablecoin transaction volumes.
