A report from Crypto.com estimates that there are over 100 million cryptocurrency users around the world in 2021.
The firm released the latest version of its on-chain market sizing Data Report in which it estimates that the global cryptocurrency user base is around 106 million people as of January 2021. Crypto.com said that Bitcoin’s current bull run has been the major reason propelling a 15 percent increase in the global cryptocurrency user base in January.
The executive summary also noted a number of other factors that have driven new users to the space, including the growth of the Decentralized Finance sector, PayPal’s announcement that it would offer cryptocurrency trading and custody to users and major institutions like MicroStrategy and Tesla openly investing in Bitcoin.
The first edition of the Data Report was released in June 2020 and provided the first instance of the firm’s global cryptocurrency user base estimate which is based on on-chain data.
How the global crypto user base is estimated
In the first instance of its Data Report, Crypto.com used data from cryptocurrency exchanges to make a well-informed assumption of the amount of cryptocurrency users around the world. This was done looking at how many deposit addresses are controlled by exchanges, which utilize ‘deposit sweeping’ to manage inflows of cryptocurrency from users.
The researchers then added the numbers from the world’s biggest exchanges and divided that by the overall market share of those exchanges to make what they deemed as a ‘reasonable’ estimate of the amount of Bitcoin holders. In May 2020, the first report estimated that there were around 66 million cryptocurrency users around the world.
The methodology for the latest report was adap[ted to the changing cryptocurrency landscape, and factored in the rise of DeFi, PayPal’s move to offer crypto services and custody to users in the US as well as major institutional investment.
“There are two main takeaways from when the data is broken down further into Bitcoin and Ethereum. Ethereum led the crypto market’s growth in August 2020, during the height of the DeFi mania. Similarly, Bitcoin saw tremendous growth in January following months of strong price action and waves of institutional adoption (PayPal, Microstrategy, and more),” an excerpt from the Crypto.com report explains.