Can Crypto Reach a Billion Users by 2025? a Closer Look at Adoption Trends

Introduction

Since Bitcoin was introduced 13 years ago, it has witnessed remarkable value growth, paving the way for the crypto market to reach a staggering $1 trillion.

In the face of macroeconomic uncertainty, crypto has gained traction as individuals seek alternatives to traditional finance. Yet, critics argue that the industry’s growth may be limited, citing internal market challenges.

The Diffusion of Innovations

This theory sheds light on technology adoption and dissemination. It shows how the acceptance of new technologies follows a bell curve, starting with innovators and early adopters, then the early and late majority, and concluding with late adopters.

Applying this, it becomes evident that the crypto market is in its early stages. Wells Fargo’s 2022 report suggests that it’s yet to reach a critical adoption point.

However, data from Global Macro Investor reveals that cryptos have experienced the fastest adoption rate among all technologies, growing at an astonishing 137% annually.

Measuring Bitcoin Adoption

Determining crypto adoption presents challenges as quantifying it is complex. Firstly, we can approach this by examining the market capital flow. While this method offers valuable insight into the market’s value, it does not provide a reliable measure of active users.

Another approach involves calculating the number of users. However, the pseudonymic way in which blockchain technology works makes it difficult to equate a crypto address to one user.

Using CEX as a Proxy

The number of users on CEX can be used to study the crypto adoption rate. Consider Coinbase: as of February 2023, it boasts around 110 million verified users, with an average yearly user growth of 92%. If it maintains this rate, the user base could triple by 2025.

Estimates suggest that the crypto industry could have approximately 605 million users by 2023. This could imply that the sector could reach 1.2 billion users by 2025.

According to the diffusion of innovation model, technology is still in its early phase if it captures only 13.5% of the market. Considering that the projected 605 million crypto users in 2023 would represent 7.5% of the world’s population, we can conclude that the crypto industry is still in its early stages.

Conclusion

The rise of distrust in traditional finance due to macroeconomic uncertainties, positions cryptocurrencies as attractive alternatives for millions of investors. As it evolves and new use cases emerge, its adoption may accelerate.

However, it is vital to recognize that these estimations are rough approximations. Unexpected events or significant regulatory changes could impact the adoption rate.

Nevertheless, when considering the crypto industry’s growth, it becomes evident that it is still in its early stages, eagerly awaiting the realization of its full potential.

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