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Bitcoin's Lightning Network capacity declined 20% in 2025 but it's NOT as bad as it sounds

Bitcoin’s Lightning Network capacity has declined from over 5,400 BTC in late 2023 to around 4,200 BTC by August 2025, a roughly 20% drop, per mempool.space data. While the raw figures imply a contraction, analysts and developers suggest the shift reflects structural evolution in routing and protocol design rather than a retreat in adoption.
The decline in public capacity accompanies a longer-term drop in public node and channel counts, which have been in steady decline since 2022, according to data from mempool.space.
Latest drop in recent days maybe caused by latest LND 0.19.2 update as mentioned here #1069842 by @02321d1dfd
Not great news. IMO the obstruction of MoE adoption is a major reason holding back growth. Govts and banks do not want Bitcoin used as a MoE. They are allowing its use as a speculative commodity because in that way they can gain custody tax and control over it.
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