• Why is it easier to say than do to quantify Bitcoin and Ethereum adoption?

  • There is no doubt that the cryptocurrency space has seen significant growth in recent years. Bitcoin, Ethereum, Cardano, MATIC, Uniswap, and Solana, to name a few, have all seen significant activity.

    Nonetheless, the rate of adoption is difficult to quantify. For example, the number of Bitcoin active addresses peaked in 2017, then fell during the 2018 bear market. It remained below the 2017 high until a new ATH was reached in 2021.

    Measuring utilization and adoption has thus been a difficult task. According to Coinmetrics, there may be another way to look at crypto-adoption, one that will lead to more constructive and adequate analyses over time.

    Is it the new black to track monthly unique addresses?

    According to Coinmetrics, the number of 30-day unique users of apps can be determined by analyzing ‘monthly active users.’ The goal now is to track activity beyond the anonymity of crypto. As a result, tracking monthly active addresses serves as a well-defined parameter over a specific time period.

    As shown in the attached chart, most crypto-assets have seen a well-defined increase in monthly unique addresses over the last three years, with addresses peaking above their 2018 high around January 2021.

    Coinmetrics has been added.

    “Major stablecoins peaked in mid-May, just before the market crash. However, it has begun to recover since mid-July as the market recovers.”

    So, tracking Bitcoin and Ethereum monthly unique addresses is sufficient?

    The argument’s technicality is sound. Consistent month-over-month growth, quantifiable growth, is determining adoption and activity. However, crypto-adoption may be higher than that at the moment.

    When monthly unique address statistics are compared to active addresses, a clear distinction emerges. The peak with active addresses is similar to the one between January 2018 and 2021, indicating an ambiguous picture. Unique addresses, on the other hand, define a proper distinction, one that indicates that the amount of activity in 2021 was greater than in 2018.

    Ethereum followed a similar pattern. Another method for estimating adoption is to track the number of addresses that hold at least one ten-billionth (>.00000001 percent ) of the total supply of various crypto-assets. As shown in the chart below, this allows assessors to filter out empty addresses.

    Institutional interest in an asset class is also important because it adds liquidity and stability to the market. Institutional interest has also increased in the last three years as a result of Bitcoin, Ethereum, and a few other altcoins. As a result, sound crypto-adoption may necessitate collective growth.

    Overall, there are no clear answers to the process of determining expansion. It is, however, becoming more conclusive and constructive by the day.

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