Why exchange channels break a favorite Bitcoin metric

The Bitcoin Lightning Network was once the crown jewel of Bitcoin’s scaling history, a living map of open channels and growing liquidity that reflects real-time adoption.

However, as the network matures, the picture is blurred. Behind the steady decline in Bitcoin Lightning’s public capacity lies a quiet transformation: exchanges, wallets and merchants are routing more payments than ever through private pathways and custodians that don’t show up on the charts.

The metric we’ve long relied on to gauge Lightning’s health might now be telling the wrong story.

Public Lightning The capacity currently is about 4,132 BTC. The nodes are 16,294 and the channels at 41,118, with an average rate of 794 ppm and an average base rate of 947 mSats.

The chart remains below the levels of 2024 as payments consolidate in exchange routes, private channels, and stablecoin pilots that do not register in public capacity.

August’s local low near 3,600 BTC provides a clean baseline to track the rebound. The trajectory aligns with a well-documented gap between collateral posted to public channels and payments moving through exchange custody boards, private bonds and multi-path routing.

That gap widens as large spaces push withdrawals and deposits onto Lightning and as wallets scale back liquidity without opening new public channels. Ours recent capacity trend explainer highlights the core point which puts in public metric fall as consolidation rather than utility drop.

Exchanges now carry a material share of real throughput.

Coinbase has Lightning live for the customers. OKX supports Lightning deposits and withdrawals with documentation limits. Kraken introduced Lightning in April 2022. Binance carry out integration in July 2023. When these places travel a larger part of flows via Lightning, fewer public channels can establish more payments, so the measured capacity can compress even as the utility for BTC grows.

Merchant and processor data points fill out the demand side. CoinGate reported that the share of BTC merchant payments routed over Lightning nearly doubled from 2023 to the first half of 2024, reaching the mid-teens, a trend that persisted until 2025.

Japan’s Mercari launches BTC payments in its marketplace app with yen settlement for sellers. South Africa’s Pick’n Pay has completed a nationwide rollout of Lightning via partnerships. By 2025 report by Breez and 1A1z claims that more than 650 million people “have access” to Bitcoin payments through Lightning-enabled applications and exchanges, which frames the total reachable users even if the active use is smaller.

The next leg focuses on stablecoins.

Tether announced on January 30 that USDt comes to Bitcoin via Lightning using Taproot Assets, opening dollar-denominated corridors on Lightning rails. Lightning Labs positions the gear as a path for stablecoin issuers and payment processors to direct dollar flows with Lightning settlement.

If major exchanges and processors add USDt alongside BTC on Lightning, transaction sizes and volumes can grow without a commensurate increase in publicly published channel collateral, which further weakens the capacity as a proxy for activity.

Wallet and protocol updates explain the shift from more routes to better routes. Splicing allows portfolios to resize existing channels instead of opening new ones, reducing cancellation of visible channels while improving liquidity placement.

Dual funding improves the initial budget distribution at channel opening, which reduces overprovisioning. BOLT 12 Offers bring reusable payment requests with recipient privacy and smoother recurring flows.

These changes encourage network operators to adopt fewer channels with higher throughput per route, a setup that reduces public capacity without compromising payment success rates.

A concise snapshot of the latest network statistics helps to anchor the present tense of the story:

Security and policy remain variable for operators and liquidity providers. Post-mortems on the replacement cycle and work on channel jamming show ongoing mitigations without losses across the network.

Regulatory cuts can be local, as seen when Kraken stopped Lightning in Germany in 2024, while maintaining global support. These factors can affect node operator incentives, which in turn affect the amount of liquidity posted to public channels versus private routes or custodians.

Scenario planning helps set expectations for the coming year without relying solely on capacity.

The base case presents the public capacity in a range of 3,500 to 4,800 BTC, with a higher performance of the dollar as the exchanges travel a larger part of withdrawals via Lightning, and the USDt pilots are online.

An upward path, led by USDt corridors and a wider processor support, raises the capacity towards 4,500 to 6,500 BTC, even as more traffic goes privately, while the routing of the exchange reaches a part of retirees in the high teens in the mid-twenties.

A downside case includes persistent fee pressure and local policy frictions pulling capacity toward 3,000 BTC and slow merchant adoption outside crypto-native verticals. These paths are based on wallet UX updates, exchange connectivity, rate conditions, and the pace of Taproot Assets integrations.

The work framework for the end of 2025 is clear.

Public capacity is a lagging and incomplete metric because throughput is concentrated in a few more capable routes and unannounced custodial edges.

Exchange integrations establish transportation, wallet upgrades clear liquidity, and USDt over Lightning opens dollar corridors.

The last capacity at 4,132 BTC sets the starting line to follow if the utility for visible capacity BTC continues to rise.