Invisible Lightning: Why exchange channels break a favorite Bitcoin metric

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

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

The metric we’ve long trusted to measure Lightning’s health might now be telling the wrong story.

Public Lightning capacity currently stands at approximately 4,132 BTC. Nodes stand at 16,294 and channels at 41,118, with an average fee rate of 794 ppm and an average base fee of 947 mSats.

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

Bitcoin Lightning Capacity (Source: mempool.space)

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

That gap widens as large venues push withdrawals and deposits over Lightning and as wallets resize liquidity without opening new public channels. Our recent capacity trend explainer highlights the core point that frames falling public metrics as consolidation rather than a drop in utility.

Exchanges now carry a material share of real throughput.

Coinbase has Lightning live for customers. OKX supports Lightning deposits and withdrawals with documented limits. Kraken introduced Lightning in April 2022. Binance completed integration in July 2023. When these venues route a larger share of flows via Lightning, fewer public channels can settle more payments, so measured capacity can compress even as utility per BTC rises.

Merchant and processor data points fill in 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 has persisted through 2025.

Japan’s Mercari is rolling out BTC payments in its marketplace app with settlement in yen for sellers. South Africa’s Pick’n Pay completed a Lightning rollout via partners at a national scale. A 2025 report from Breez and 1A1z claims more than 650 million people “have access” to Bitcoin payments across Lightning-enabled apps and exchanges, which frames total reachable users even if active usage is smaller.

The next leg centers on stablecoins.

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

If large exchanges and processors add USDt alongside BTC over Lightning, transaction sizes and volumes can grow without a proportional increase in publicly posted channel collateral, which further weakens capacity as a proxy for activity.

Wallet and protocol upgrades explain the shift from more routes to better routes. Splicing lets wallets resize existing channels instead of opening new ones, reducing visible channel churn while improving liquidity placement.

Dual funding improves the initial balance distribution at channel opening, which reduces over-provisioning. BOLT12 offers bring reusable payment requests with receiver 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 stats helps anchor the present tense of the story:

Metric Latest Short-term change

Network capacity	4,132 BTC (~$453M)	Rebounded from late-August local low
Nodes	16,294	-6.8% d/d
Channels	41,118	-2.5% d/d
Avg channel capacity	9,820,993 sats (~$10,763)	—
Avg fee rate	794 ppm	+3.2% d/d
Avg base fee	947 mSats	-0.2% d/d

Security and policy remain variables for operators and liquidity providers. Post-mortems on replacement cycling and work on channel jamming show ongoing mitigations without network-wide losses.

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

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

The base case features public capacity in a 3,500 to 4,800 BTC range, with higher dollar throughput as exchanges route a larger share of withdrawals via Lightning, and USDt pilots come online.

An upward path, driven by USDt corridors and broader processor support, lifts capacity toward 4,500 to 6,500 BTC, even as more traffic goes private, while exchange routing reaches a share of withdrawals in the high teens to mid-twenties.

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

Scenario Public capacity Exchange routing via LN Merchant LN share change Primary drivers

Consolidation base	3,500–4,800 BTC	10–20% of BTC withdrawals	+3 to +6 percentage points vs. 2024	BOLT12, splicing, Coinbase, and OKX routing, first USDt corridors
USDt lift	4,500–6,500 BTC	20–30% of BTC withdrawals	Broader merchant coverage	Tether and Taproot Assets tooling, processors add USDt over Lightning
Fee or policy drag	~3,000 BTC test	Lower exchange routing	Slower outside crypto-native niches	High fees, local rules that constrain LN edges

The working frame for late 2025 is clear.

Public capacity is a lagging and incomplete metric because throughput is concentrating into fewer, more capable routes and into custodial edges that are not advertised.

Exchange integrations set the transport, wallet upgrades clean up liquidity, and USDt over Lightning opens dollar corridors.

The latest capacity at 4,132 BTC sets the starting line for tracking whether utility per BTC of visible capacity continues to climb.

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