Bitrabo Editorial
The world of digital assets is rapidly becoming more mainstream, as highlighted in the annual “State of Crypto” report from the venture capital company Andreessen Horowitz.
The report points out the expanding global market for stablecoins, advancements in infrastructure, and a significant drop in transaction fees, all leading to an increase in crypto activities over the past year.
Crypto Addresses Reach New Heights
Eddy Lazzarin, CTO at Andreessen Horowitz, mentioned that “Crypto activity is at an all-time high,” indicating extensive growth in various areas of the market.
Published on Wednesday, the report divides crypto activity into three key categories: users, owners, and active crypto addresses.
The term “owners” refers to individuals who hold digital assets without necessarily engaging in blockchain activities, while “users” are those actively interacting with blockchain for transactions like buying NFTs or using Circle’s USDC stablecoin.
It’s important to note that only a small group—about five to ten percent—of crypto owners are considered active users.
The report highlights a remarkable surge in active monthly addresses, rising to 220 million in 2024, significantly up from below 100 million in 2023.
According to the firm’s findings, this growth reflects adoption trends seen during the early days of the internet.
Currently, there are 617 million global crypto owners, with active user numbers ranging between 30 million and 60 million.
Lazzarin believes the gap between owners and active users is due to “the complex user experience,” suggesting that improving app usability, reducing costs, and clarifying regulations could motivate inactive crypto owners to participate more.
Lower Transaction Fees Fueling Growth
Stablecoins have achieved what Lazzarin calls “product-market fit.” The report indicates that 32% of daily crypto activities are now centered around stablecoins, ranking just below decentralized finance (DeFi).
This growth is particularly evident in countries battling hyperinflation, such as Argentina, where the peso has lost 82% of its value. In this context, Lazzarin notes that many Argentinians have adopted stablecoins to “protect” their assets, resulting in a staggering 10,000% rise in stablecoin trading on the Mexican exchange Bitso.
The decline in transaction fees has been instrumental in driving this unprecedented activity in the digital asset market. The report mentions that improvements in Ethereum’s scaling technology have reduced the cost of sending USD internationally by 99%.
While traditional international wire transfers usually cost about $44, transferring USDC using Coinbase’s Base Layer 2 solution is now under one cent.
The report attributes this drop in costs to a “maturing” digital asset framework, which encompasses new blockchains and better interoperability.
As of now, the total market capitalization of cryptocurrencies stands at $2.27 trillion, with roughly $250 million of new capital entering the digital asset market in the last five days.
Featured image from DALL-E, chart from TradingView.com