Crypto wallet adoption has been steadily rising for the past many years; however, the rise has not been uniform. Adoption rises in tandem with the price, and this correlation is called Satoshi Cycle. The institutional adoption increased in 2018 when the BTC price plummeted. Still, the crypto wallet adoption rate has always been a rising trend.
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The wallet trend took off in the third quarter of 2016 when Bitcoin price peaked around $20,000. Since then, the sale of BTC wallets has been climbing steadily. Interestingly, the quarter-on-quarter growth is unaffected by the price volatility of the cryptocurrencies. In Q3 of 2016, the number of registered cryptocurrency wallets was around ten million. This figure jumped to 40 Million by the end of the third quarter in 2019 representing a threefold increase in adoption.
Crypto wallet adoption numbers hide a different story
The rise in crypto wallet adoption over the years does not necessarily mean that more people are entering the crypto realm. It is vital to break down this number and understand the real dynamics behind the figure. The current number of 42 Million wallets does not mean an equal number of users. Often, one user has multiple wallets to deal with transaction issues and privacy concerns.
As per Chainalysis, Bitcoin users have increased in the recent past. Only one-third of these 42 Million wallets are in active use. Furthermore, not every wallet serves the same purpose. Some are used for active daily transactions and trading activities.
Bitcoin is often considered a store of value and thus, many people collect it with a long-term view. It is seen as an investment-grade asset. No wonder, some wallets are just bought to store Bitcoin without being used for daily activities. Chainalysis reports that approximately five million users store Bitcoin in their crypto wallets only to gain from speculative investment profits.
This treasure trove of data points to one simple truth – crypto wallet adoption is on an upward trend. The blockchain technology is now entering the mainstream and challenging financial bigwigs.
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