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The adoption rate into the Crypto world


Number of Bitcoin addresses in relation to price (in logarithmic scale)


The recent cases of bankruptcies of so-called CASPs, or Crypto Asset Service Providers, known to the public as Cryptocurrency Exchanges, have cooled, at least apparently, the interest of the general public for an emerging technological sector such as Digital Assets.

FTX in November 2022 in the United States and the more modest but homegrown TRT, or The Rock Trading in Italy, have highlighted the counterparty risks deriving from leaving one's assets in the hands of subjects with little supervision and controls.

Finally, in May 2023, the MiCA regulation, or Market in Crypto Assets regulation, was approved, which regulates the activities of these very particular subjects, the exchanges, in all the member states of the European Union.

Obviously, as demonstrated by the cases of recent bank failures in the United States, the regulation does not guarantee that there will no longer be failures of this kind in the world of crypto assets, but at least it will limit the cases and limit responsibilities and protections for small investors .

As I have explained in several articles over time (and I will do so again in the future) the long-term growth rate of the digital assets market is closely linked to the growth in the adoption of this technology in the world.

One would think that after a disastrous 2022, where digital assets have lost on average from 60% to 80% of their value, the adoption rate has stopped or even gone back, because frightened and disappointed people have withdrawn their investments at a loss and the speculative investment chapter on digital assets closed.

In reality, as can be seen from the graph below, the number of new wallets opened each month exceeds 12 million.

Fig. 1 number of new wallets per day


You got that right, around 12 million new addresses a month which obviously won't correspond to 12 million new users, but in any case at least a third are estimated to be people who decide to have their own wallet and begin to understand how this fantastic world works.

Few sectors can boast such a deep-rooted and strong growth and adoption in the world, especially when it comes to financial services, such as economic transactions.

Even more impressive is the growth curve of new addresses (or "Addresses") issued, which has recently reached and exceeded one billion addresses, even if in this case it is important to bear in mind that many professional operators create addresses for a single transaction and therefore is absolutely not an indication of how many real users currently hold a Bitcoin.


Fig. 2 total number of issued addresses


A more representative indication of the number of people who have bought Bitcoin today comes from the number of addresses that have a positive balance other than zero

In this case, although many people have more than one wallet, it more reasonably indicates the number of people in the world who hold a fraction of Bitcoin.


Fig. 3 Wallet with non zero balance


You can see from this graph that there are over 45 million people who hold a fraction of Bitcoin, which I recall is currently around 18 million in circulation.

As you can easily guess, already among the current owners of Bitcoin, who are precursors, not everyone can own a whole Bitcoin, many of them own fractions of bitcoins, called in technical jargon Satoshi, which I remember is the smallest entity of the bitcoin equal to 0.00000001 Bitcoin.

The question therefore arises spontaneously: how many are the lucky owners of at least one Bitcoin?


Fig. 4 Wallet with at least 1 bitcoin


The number of wallets controlling addresses with at least 1 bitcoin recently surpassed one million, steadily growing despite the so-called “crypto winter” of 2022.

This is a clear signal, for bitcoin's detractors who have repeatedly declared bitcoin dead, that in reality the system is spreading despite the price, therefore not for simple speculation as many claim, but because it incorporates intrinsic characteristics that make it a valuable assets.

In the western world we see more bitcoins as a speculation or at best an investment, because we normally trust the banking system and it is deeply rooted in our habits, but in the world people who have a current account are 69% of the entire population, means that over 30% of the world's population, equal to 2.4 billion people, do not have access to the financial system, even if they own a smartphone and many of them also live in states that have devastating hyperinflation, such as for example Argentina and Turkey.

In these states, holding bitcoin is by far the best way to preserve purchasing power against inflation.

This phenomenon of growth linked to the adoption, with also the cyclical factor deriving from the programmed and non-modifiable deflationary emission policy of Bitcoin (unlike the Fiat currency) is very well known by the so-called Whales, or whales that own very large quantities of Bitcoin in their wallets.


Fig. 5 Wallet with more than 10,000 Bitcoins


From this last graph it is clear that the more experienced (and lucky or good at knowing the nascent bitcoin) have understood Bitcoin cycles well and have correctly sold in the moments of greatest growth of 2021 and have been wisely buying back since December 2022.

The question arises spontaneously, if you want to have virtuous behavior in investments, should you follow the experts or your own fears and emotions?


Everyone draws their own considerations and if they feel like sharing them in the comments.


Happy digital investments to you all

Crypto-ciao

Daniel

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