In June 2024, the number of monthly active mobile crypto wallet users reached an all-time high of 29 million.
撰文：Daren Matsuoka、Robert Hackett、Eddy Lazzarin
Compiled by: 1912212.eth, Foresight News
7 key points:
Cryptocurrency activity and usage hit all-time highs
Cryptocurrency becomes a major political issue ahead of US election
Stablecoins have found product-market fit (PMF)
Infrastructure increases throughput and significantly reduces transaction costs
DeFi remains popular and continues to grow
Cryptocurrencies hold promise for solving some of AI’s most pressing challenges
More scalable infrastructure unlocks new on-chain applications
Cryptocurrency activity and usage hit all-time highs
There have never been so many monthly active crypto addresses. In September 2024, 220 million addresses interacted with the chain at least once, a number that has more than tripled since the end of 2023. (As a metric, active addresses are more easily manipulated than other metrics)
The surge in activity is mainly attributed to Solana, with about 100 million active addresses. It is followed by NEAR (31 million active addresses), Coinbase's second-layer network Base (22 million), Tron (14 million), and Bitcoin (11 million). Among Ethereum Virtual Machine (EVM) chains, the most active chain after Base is Binance's BNB Chain (10 million), followed by Ethereum (6 million). (Note: To calculate the total of 220 million, active addresses on the EVM chain are deduplicated by public key.)
These trends are also reflected in our Developer Vitality Dashboard. The largest change in total share of developer interest was for Solana. Specifically, the data tells us that the total share of founders who are building or interested in building on Solana has grown from 5.1% last year to 11.2% this year. Base follows closely behind with a share increase from 7.8% last year to 10.7%, and Bitcoin has grown from 2.6% last year to 4.2%.
In absolute terms, Ethereum still attracts the most developer interest, with a total share of 20.8%, followed by Solana and Base. Next are Polygon (7.9%), Optimism (6.7%), Arbitrum (6.2%), Avalanche (4.2%), and Bitcoin (4.2%).
Meanwhile, the number of monthly active mobile crypto wallet users reached an all-time high of 29 million in June 2024. While the United States accounts for the largest share of monthly active mobile wallet users (12%), its share of the total user base has declined in recent years as cryptocurrency adoption around the world has increased and more projects have avoided U.S. regulation through geo-shielding.
Cryptocurrency’s influence continues to expand globally. After the United States, countries with a larger share of mobile wallet users include Nigeria (which provides regulatory clarity through initiatives such as regulatory incubation programs and significant growth in consumer uses such as bill payments and retail purchases), and India (which has a booming population and mobile phone penetration). rates are high) as well as Argentina (where many residents are flocking to cryptocurrencies, especially stablecoins, due to currency depreciation).
While it is easy to measure active addresses and monthly active mobile wallet users, the actual number of active crypto users is more difficult to measure. However, using a variety of methods, we estimate that there are between 30 million and 60 million monthly active crypto users worldwide, which would only represent 5%-10% of the total number of 617 million cryptocurrency holders estimated by Crypto.com worldwide in June 2024.
This difference highlights a huge opportunity to reactivate passive cryptocurrency holders. As major infrastructure improvements enable new and compelling applications and user experiences, more dormant cryptocurrency holders may re-emerge as active on-chain users.
Cryptocurrency becomes a major political issue ahead of US election
Cryptocurrency has moved to the heart of the national discussion during this election cycle.
Therefore, we measured the relative level of interest in cryptocurrencies in swing states. Pennsylvania and Wisconsin, two battleground states expected to be the most intense in November, saw cryptocurrency search interest jump to fourth and fifth place as a proportion of total searches after the last election in 2020. Michigan ranked eighth, while Georgia remained the same. Meanwhile, Arizona and Nevada have seen a slight decline in interest since 2020.
One factor that could spark interest in cryptocurrencies this year is the listing of exchange-traded products (ETPs) for Bitcoin and Ethereum. These ETPs expand access for investors, and the number of people holding cryptocurrencies in the U.S. is expected to grow. Bitcoin and Ethereum ETPs already contain $65 billion in on-chain holdings. (Note: Although these products are often referred to as ETFs, they are actually ETPs registered through the SEC's Form S-1, indicating that their underlying portfolios do not include securities.)
The SEC’s approval of the ETP represents a major milestone for cryptocurrency policy. Regardless of who wins the November election, many politicians expect policy momentum to grow as both parties work together to push for crypto legislation. An increasing number of policymakers and politicians in both camps are taking a positive stance toward cryptocurrencies.
This year, the cryptocurrency industry has also brought other important progress in the policy field. At the federal level, the House of Representatives passed the Financial Innovation and Technology Act of the 21st Century (FIT21) with bipartisan support, with 208 Republicans and 71 Democrats voting in favor. If passed and approved by the Senate, the bill will provide much-needed regulatory clarity for cryptocurrency entrepreneurs.
Just as importantly, at the state level, Wyoming passed the Decentralized Nonprofit Associations Act (DUNA), a law that provides legal recognition for decentralized autonomous organizations (DAOs), enabling blockchain networks to operate legally while remaining decentralized.
The European Union and the United Kingdom have been the most proactive on cryptocurrency policy and regulation. In contrast, multiple European agencies have issued more public consultations than the U.S. Securities and Exchange Commission. Meanwhile, the EU's (Crypto Markets Act) (MiCA) has become the first comprehensive cryptocurrency policy system and is scheduled to be fully effective by the end of the year.
Stablecoins, one of the most popular crypto products, are also a focus of policy discussions, with multiple bills circulating in Congress. One of the driving forces behind this topic, at least in the United States, is the recognition that stablecoins can strengthen the dollar's position globally, even as the dollar's global reserve currency status declines. Currently, more than 99% of stablecoins are denominated in dollars, far more than the next largest currency, euro-denominated stablecoins, which account for only 0.20%.
In addition to flexing the dollar’s muscle globally, stablecoins could also strengthen America’s financial foundations domestically. Although stablecoins are only a decade old, they’ve already ranked among the top 20 holders of U.S. debt, ahead of countries like Germany.
While some countries are exploring central bank digital currencies (CBDCs), the stablecoin opportunity before the U.S. is clear. Given these discussions and the growing attention being paid to cryptocurrencies by politicians, we expect more countries to begin seriously developing their cryptocurrency policies and strategies.
Stablecoins have found product-market fit (PMF)
By enabling fast, low-cost, global payments, stablecoins have become one of the most obvious “killer apps” for cryptocurrencies. As Rep. Ritchie Torres (D-N.Y.) wrote in a September op-ed for the New York Daily News: “The proliferation of dollar-denominated stablecoins — made possible by the proliferation of smartphones and cryptography — could be the largest experiment in financial equality in human history.”
Massive scaling upgrades have dramatically reduced the cost of cryptocurrency transactions, especially those involving stablecoins, by more than 99% in some cases. On Ethereum, gas fees for transactions involving USDC averaged $1 this month, compared with an average of $12 in 2021. The average fee to send USDC on Coinbase’s popular second-layer network, Base, is less than 1 cent. (Note: These figures may not include certain entry and exit costs.)
By comparison, the average cost of an international wire transfer is $44.
Stablecoins make value transfers more convenient. In the second quarter of 2024 (ending June 30), stablecoin transaction volume reached $8.5 trillion, involving 1.1 billion transactions. During the same period, stablecoin transaction volume was more than double Visa's $3.9 trillion. The fact that stablecoins can be compared with well-known payment service providers such as Visa, PayPal, ACH and Fedwire greatly proves their practicality.
Stablecoins are not a flash in the pan. If you compare stablecoin activity to the volatile market cycles of cryptocurrencies, there seems to be no correlation between the two. In fact, even as spot cryptocurrency trading volumes have declined, the number of addresses using stablecoins has continued to increase each month. In other words, people are using stablecoins for purposes beyond simple transactions.
Stablecoins account for nearly a third of daily cryptocurrency usage, at 32%, second only to DeFi at 34%, measured by the share of daily active addresses. The rest of the cryptocurrency usage is distributed in infrastructure (cross-chain bridges, oracles, MEV, account abstraction, etc.), token transfers, and some other areas such as emerging applications such as games, NFTs, and social.
Infrastructure increases throughput and significantly reduces transaction costs
The reason why stablecoins have become so popular and easy to use is mainly due to the progress of the underlying infrastructure. First, the capacity of the chain is growing. Due to the rise of Ethereum L2 and other high-throughput chains, the chain processes more than 50 times the number of transactions per second than four years ago.
Even more surprising is that Ethereum’s biggest upgrade of the year — Dencun, or EIP-4844 — will significantly reduce L2 fees when implemented in March 2024. Since then, the fees paid by L2 on Ethereum have dropped significantly, even as the ETH-denominated value on L2 has continued to rise. In other words, as blockchain networks become more popular, they also become more efficient.
A similar story is happening with the development of zero-knowledge proofs (ZK proofs), a technology that has important implications for blockchain scaling, privacy, and interoperability. Even as the monthly expenditure on verifying zero-knowledge proofs on Ethereum has fallen, the value of ZK Rollups denominated in ETH has continued to rise. In other words, not only are zero-knowledge proofs becoming more popular, but their costs are also falling. (“Zero-knowledge” is used here as an umbrella term to refer to cryptographic techniques that can succinctly prove the correctness of computations outsourced to the Rollup network.)
ZK technology is very promising, providing developers with a new path to cheap and verifiable blockchain computing. However, zero-knowledge virtual machines (zkVMs) still have a long way to go in terms of performance, and there is still a big gap to catch up with traditional computers, which is an observation that needs to be treated with caution.
With these infrastructure improvements, it’s easy to see why blockchain infrastructure remains one of the most popular areas for developers, with L2 already one of the top five development subcategories we track.
DeFi remains popular and continues to grow
The only area that attracts developers more than infrastructure is DeFi, which also accounts for the largest share of cryptocurrency usage, with 34% of daily active addresses coming from DeFi. Since the emergence of DeFi in the summer of 2020, decentralized exchanges (DEXs) have grown to account for 10% of spot cryptocurrency trading activity, which four years ago occurred entirely on centralized exchanges.
Currently, more than $169 billion is locked in thousands of DeFi protocols. Some of the most important DeFi subcategories involve staking and lending.
Just over two years since Ethereum completed its transition to Proof of Stake (PoS), the network’s energy consumption and environmental impact have been drastically reduced. Since then, the share of ETH staked has risen to 29% from 11% two years ago, greatly enhancing the network’s security.
Although still in its early stages, DeFi offers a promising alternative to the growing trend toward centralization and concentration of power in the U.S. financial system. The number of U.S. banks has fallen by two-thirds since 1990, with large banks dominating asset allocation.
Cryptocurrencies hold promise for solving some of AI’s most pressing challenges
AI is not only leading the trend in the entire technology industry, but it has also become one of the hottest trends this year in the cryptocurrency field.
AI is one of the most talked-about trends among cryptocurrency influencers on social media. Surprisingly, there is a large overlap between users visiting chatgpt.com and those visiting top cryptocurrency websites, indicating a strong connection between cryptocurrency and AI users.
Crypto developers also have a strong connection to AI. According to our “Builder Energy” dashboard, about a third of crypto projects (34%) say they are using AI, regardless of the field they are building projects in, compared to 27% a year ago. The most popular category for applying AI technology is blockchain infrastructure projects.
Given that the cost of training cutting-edge AI models has quadrupled annually over the past decade, we believe AI could lead to further concentration of power on the Internet. If left unchecked, only the largest tech companies are likely to have the resources to train the latest AI models.
The challenges associated with centralization of AI are almost the opposite of the opportunities offered by the decentralization of blockchain networks. A number of crypto projects have already begun attempting to address these challenges, including Gensyn (by democratizing access to AI computing resources), Story (helping creators get compensated by tracking intellectual property), Near (by running AI on an open-source, user-owned protocol), and Starling Labs (helping verify the authenticity and provenance of digital media).
The intersection of cryptocurrency and AI is likely to intensify further in the coming years.
More scalable infrastructure unlocks new on-chain applications
As transaction costs drop and chain capacity increases, potential consumer applications of cryptocurrency become more viable.
Take NFTs for example. A few years ago, when transaction fees were relatively high, people were trading NFTs through the secondary market, amounting to billions of dollars. Today, this activity has declined, replaced by a new consumer behavior: minting low-cost collections of NFTs on social apps like Zora and Rodeo. This represents a significant shift in the NFT market that was unimaginable before transaction fees were significantly reduced.
Social networks are another example. Although they only account for a small portion of daily on-chain activity today, they attract a lot of developer interest: according to our dashboard, social-related crypto projects account for 10.3% in 2024. In fact, social network-related projects, such as Farcaster, have become one of the top five most popular development subcategories this year.
At the same time, on-chain games are pushing chain scalability to its limits. For example, the Rollup system used by Proof Of Play’s sea adventure role-playing game (Pirate Nation) has always consumed the most gas per second in Ethereum Rollup.
As the November election approaches, crypto prediction markets are enjoying a moment of vigour and boosting the overall prediction market, despite the fact that prediction markets are not legal in the US. Kalshi, a non-crypto prediction market, won a victory in a lower court last month while pursuing a federal lawsuit surrounding election contracts. (As of now, registered exchanges can offer traditional futures contracts based on elections.)
New consumer behaviors are already emerging. These new experiences were not possible in the past due to the complexity of blockchain infrastructure and high transaction costs. As blockchain technology improves along the classic technology price-performance curve, more such applications are expected to flourish.
Overall, the state of cryptocurrency has made significant progress over the past year in terms of policy, technology, consumer adoption, and more. There have been major policy milestones, including the sudden approval and listing of Bitcoin and Ethereum ETPs, as well as the passage of important bipartisan crypto legislation. From scaling upgrades to the rise of Ethereum L2 and other high-throughput chains, there have been significant infrastructure improvements. From the growth of mainstays like stablecoins to the exploration of emerging categories like AI, social networks, and gaming, there are new applications being built and used.
Whether we have entered the fifth wave of the price-innovation cycle remains to be seen. Regardless, as an industry, cryptocurrencies have made undeniable progress over the past year. As ChatGPT has proven, it only takes one breakthrough product to change an entire industry.
