Bitcoin and Ethereum played a significant role as major catalysts, driving a 34% growth in crypto usage in 2023.
Global cryptocurrency usage has surged above 500 million, thanks to the rise in DeFi activity on Bitcoin and Ethereum’s technological upgrade after the merge, according to a report by Crypto.com. The number of cryptocurrency holders or users increased from 432 million to approximately 580 million worldwide, experiencing a 34% growth in just 12 months due to breakthroughs on the two largest blockchains.
Bitcoin (BTC) witnessed a 33% expansion in participants, rising from 222 million at the beginning of last year to nearly 300 million by December. The report attributes BTC’s adoption explosion to institutional interest and the introduction of spot BTC ETFs by issuers like BlackRock. The approval of spot BTC ETFs on January 10 resulted in billions of dollars in trading volume during the first week of trading.
Furthermore, the proliferation of inscriptions and ordinals has contributed to increased on-chain activity on the largest decentralized network in the crypto space. Inscriptions enable users to create assets similar to Ethereum NFTs and ERC-20 tokens on Bitcoin’s blockchain. These inscriptions, known as BRC-20 tokens, gained both demand and scrutiny after their debut in the first half of 2023. CoinGecko values this category as a $2.7 billion market, with speculators anticipating further market cap appreciation throughout the year. However, some developers have raised concerns about inscriptions, considering them a bug, and have even reported Bitcoin Ordinals to U.S. authorities.
Ethereum (ETH), the second-largest cryptocurrency network and asset, witnessed a rise in ownership from 89 million to 124 million, representing a 39% increase and accounting for about 21% of global owners. This growth can be attributed to the Shanghai upgrade, which unlocked staked Ether and allowed withdrawals. The upgrade was crucial as Ethereum transitioned from its previous proof-of-work model to a proof-of-stake design, marking the network’s largest technological overhaul. The next upgrade for Ethereum, called Dencun, is currently in its testing phase and has recently been deployed on the Georli testnet.
In conclusion, the surge in DeFi activity on Bitcoin and Ethereum’s technological upgrade has propelled global crypto usage above 500 million, with Bitcoin experiencing significant adoption due to institutional interest and the introduction of spot BTC ETFs. Additionally, the rise of inscriptions and ordinals has contributed to increased on-chain activity, while Ethereum’s ownership growth can be attributed to the Shanghai upgrade and its transition to a proof-of-stake design.
