As a seasoned analyst with a decade-long career tracking the evolution of technology and finance landscapes, I find the latest “State of Crypto” report from Andreessen Horowitz both intriguing and encouraging. Having witnessed the early days of the internet, I can’t help but draw parallels between the rapid growth of crypto and the internet in its infancy.
According to a yearly report titled “State of Crypto,” issued by venture capital company Andreessen Horowitz, we’re witnessing a growing acceptance and normalization of digital assets in our society.
The document highlights the increasing global interest in stablecoins, advancements in related infrastructure, and a significant drop in transaction costs, collectively fueling an uptick in cryptocurrency transactions over the past year.
Active Monthly Crypto Addresses Surge To 220 Million
Eddy Lazzarin, the Chief Technology Officer at Andreessen Horowitz, pointed out that crypto-related activities have reached a record peak, suggesting substantial expansion in various sectors of the market.
As a researcher, I find myself delving into the world of cryptocurrencies, where our recent findings have segmented the activity into three primary areas: individual users, holders (or owners), and actively used crypto addresses. This classification provides a comprehensive view of the ecosystem’s dynamics.
In simpler terms, the term “owners” refers to people who hold digital assets but do not interact directly with the blockchain. On the other hand, “users” are those who engage in transactions on the blockchain, like buying Non-Fungible Tokens (NFTs) or transferring Circle’s USDC stablecoin.
It’s worth noting that just a fraction, ranging from 5% to 10%, of cryptocurrency holders are considered active users.
In my analysis, it’s worth noting that there was a significant jump in the number of active monthly cryptocurrency addresses I observed. By 2024, this figure had skyrocketed to an impressive 220 million, marking a substantial growth from around 100 million in 2023.
Based on their findings, this trend seems similar to the early expansion phases seen when the internet was just starting out.
Moreover, it’s been estimated that approximately 617 million individuals worldwide now own cryptocurrencies, with the number of active users fluctuating between 30 and 60 million.
Lazzarin explains that the gap between crypto owners and those actively using it is largely due to a “complicated user experience.” He proposes that simplifying the app’s usability, reducing costs, and clarifying regulations could draw back inactive crypto owners who are currently disengaged.
Decline In Transaction Fees Key To growth?
Stablecoins have achieved a suitable match between their product and market demand, according to Lazzarin. It’s worth noting that, apart from Decentralized Finance (DeFi), they now account for 32% of daily cryptocurrency activity, leading all other categories in this regard.
This growth has been especially pronounced in countries facing hyperinflation, such as Argentina, where the local peso depreciated by 82%. In response, Lazzarin explains that many Argentinians have turned to stablecoins to “safeguard” their assets, leading to a 10,000% increase in stablecoin trading on the Mexican exchange Bitso.
Boosted by lower transaction fees, there’s been an unprecedented level of action in the digital assets sector. The report underscores the fact that improvements in Ethereum‘s scalability technologies have slashed the expense of transferring US dollars across borders by a massive 99%.
Instead of the usual $44 charged for traditional international wire transfers, using Coinbase’s Layer 2 solution to send USDC only costs approximately one penny.
As a seasoned crypto investor, I’ve noticed that the cost of transactions has significantly dropped, and I believe it’s due to the maturity of our digital asset infrastructure. This evolution includes the emergence of novel blockchain technologies and enhanced interoperability among them.
Currently, I’m observing that the collective worth of all cryptocurrencies is about $2.27 trillion. Over the last five days, a significant $250 million has been poured into the crypto market, enriching the digital asset ecosystem.
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2024-10-17 15:12