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Crypto Dead In 2024? These Metrics Tell A Different Story

Published June 24, 2024 11:12 AM
Andrew Kamsky
Published June 24, 2024 11:12 AM

Key Takeaways

  • Crypto is not dead; it continues to evolve and grow, with increasing adoption, new technologies, and ongoing interest from investors and businesses alike.
  • DeFi’s Total Value Locked (TVL) in May 2024 reached $192 billion, illustrating financial growth.
  • NFTs are projected to generate $2.378 billion in revenue in 2024, and expand into new and diverse sectors.
  • Regulatory clarity and Bitcoin ETFs have improved the legitimacy and accessibility of cryptocurrencies globally.

Amid Bitcoin’s consolidation at the peak in 2024, where the digital store-of-value has been fluctuating within a 20% range for the past five months, varying opinions on the inevitable future of cryptocurrencies have emerged. For the millionth time, people have asked once again whether “crypto is dead?” or whether “crypto is dying” or even contemplating the “death of crypto.” 

Contrary to the uncertain claims being made, the data indicates that crypto is alive and thriving. Several key metrics reveal a resilient and growing ecosystem.

Metric 1: Growing User Adoption in Crypto

Number of Active Crypto Wallet Addresses

The number of active crypto wallet addresses continues to grow linearly and upwards despite the volatility and the bear cycle of 2022 in the cryptocurrency market. In 2024, over 400 million wallets are holding cryptocurrency, as quoted in the 2024 Crypto Spring Report .

400 million Wallets Hold cryptocurrency In 2024 | Source: Crypto Spring Report. 
400 million Wallets Hold cryptocurrency In 2024 | Source: Crypto Spring Report.

It’s important to note that one wallet does not equate to one user, as both institutions and individuals often maintain multiple wallets. Nonetheless, this significant volume of wallet growth underscores the expanding use of cryptocurrency.

Number of Active Crypto Wallet Addresses (Overall Growth and New Users)

The chart below illustrates the trend in Bitcoin’s active addresses  (7-day moving average) alongside its price from 2010 to 2024. Over this period, there has been a clear upward trajectory in the number of active Bitcoin addresses, highlighting the growing engagement and adoption of Bitcoin. 

Bitcoin Active Addresses | Source: LookIntoBitcoin
Bitcoin Active Addresses | Source: LookIntoBitcoin

Despite periods of volatility, the number of active addresses has shown consistent growth, reaching peaks during significant price rallies, such as in late 2017 and early 2021. 

The steady increase in active addresses, even during bear markets, underscores the enduring interest and participation in the Bitcoin ecosystem. This growth in active addresses is a strong indicator of the expanding use and acceptance of Bitcoin and in 2024 the number of active addresses has corrected significantly which might indicate a potential trend reversal. 

An increase in Bitcoin’s price is likely to occur once active addresses change trajectory upwards. This growth in active addresses is a strong indicator of the expanding use and acceptance of Bitcoin, reflecting a robust and evolving user base poised for future growth.

Country-Wise Crypto Adoption Rates

In 2024, the global adoption of Bitcoin has risen, with countries across various continents adopting the digital currency in the similar fashion to El Salvador. For instance, Argentina and Brazil lead in Latin America, using Bitcoin as a hedge against economic instability

South Africa is at the forefront in Africa, promoting financial inclusion through digital currencies. In Asia, India’s adoption reflects a growing interest in digital assets, while South Korea integrates Bitcoin into mainstream finance.

Crypto Growth Worldwide | Source: Statista
Crypto Growth Worldwide | Source: Statista

Europe sees significant growth in Switzerland, Portugal, and the Netherlands, indicating an increasingly progressive opinion on cryptocurrencies. North America, especially the U.S., shows impressive adoption driven by retail and institutional interest. 

Countries like Mexico, Chile, and the Dominican Republic are also leveraging Bitcoin to better their financial autonomy. 

This widespread adoption highlights the shift towards Bitcoin that is taking place as a cornerstone of modern financial systems globally.

Increase in Institutional Adoption (Companies, Banks, Investment Firms)

As of April 2024, MicroStrategy Inc. leads public companies in holding Bitcoin on their balance sheet with 214,400 BTC (latest). 

Marathon Digital Holdings follows with 17,381 BTC, demonstrating significant commitment to cryptocurrency. 

Other notable companies include Tesla Inc. with 9,720 BTC, Coinbase Global Inc. with 9,110 BTC, and Hut 8 Mining Corp. with 8,450 BTC.

Public Companies With Bitcoin On Balances Sheet | Source: Crypto Spring Report. 
Public Companies With Bitcoin On Balances Sheet | Source: Crypto Spring Report.

 These holdings highlight a mix of crypto-native and non-crypto-native firms, illustrating the widespread adoption and integration of Bitcoin across various industries. 

The above data shows that institutional interest in Bitcoin remains strong, with companies using Bitcoin as a strategic asset to diversify and strengthen their financial positions.

Metric 2: Increased Transaction Volume In Cryptocurrency

On-Chain Transaction Volume

The chart below illustrates Bitcoin’s on-chain transaction volume  (7-day moving average) from 2017 to 2024. Bitcoin’s transaction volume experienced several peaks, notably during significant market rallies. In late 2017, volume spiked as Bitcoin reached its then all-time high, followed by a more sustained increase starting in late 2020, coinciding with another major bull run. 

On-chain Volume (7DMA) BTC | Source: Glassnode
On-chain Volume (7DMA) BTC | Source: Glassnode

This period saw volumes exceeding $300 billion at various points through to 2021 and 2022. As of early 2024, the transaction volume shows a recovering trend, indicating renewed interest and activity in the Bitcoin market.

On-chain Volume (7DMA) Ethereum | Source: Glassnode
On-chain Volume (7DMA) Ethereum | Source: Glassnode

The chart below illustrates Ethereum’s on-chain transaction volume  (7-day moving average) from 2017 to 2024. Ethereum’s transaction volume has also shown growth, with notable peaks during major market activities. 

In early 2018, volume spiked to nearly $20 billion,following a period of lower activity, the volume rose again in late 2020 and early 2021, coinciding with the DeFi boom and Ethereum’s price rally, reaching peaks over $20 billion. As of early 2024, the volume shows a steady pattern, suggesting consistent use and the importance of Ethereum in the blockchain ecosystem for decentralized applications, smart contracts, and financial transactions.

Growth Of Decentralized Exchanges (DEXs)

Decentralized exchanges (DEXs) have seen growth in 2024, becoming important platforms within the Web3 ecosystem. Daily trading volumes on DEXs surpassed $1.3 billion in October 2023, driven by over 209 million users engaging in financial transactions, with Uniswap leading the pack. 

This rise in interest and increased activity reflects the increasing preference for DEXs due to the enhanced control over assets, improved privacy, and superior security compared to centralized exchanges. 

The collapse of centralized platforms like FTX has further rearranged narrative for a more mature industry and the appeal of DEXs, underscore the resilience and transparency of DEXs. 

Innovations in smart contracts and liquidity pools, along with growing community support, have continued to shape the importance that DEXs hold as essential components of the modern cryptocurrency landscape, this momentum is expected to continue to expand into 2024.

The Rise Of Stablecoins

The rise of stablecoins has been instrumental to the crypto industry, particularly for payments and remittances. Stablecoins, typically pegged to the U.S. dollar, offer stability and ease of use, making them ideal for everyday transactions. 

From January 2021 to March 2024, stablecoins have come to represent half of all cryptocurrency transaction volumes. In March 2024, global stablecoin purchases exceeded $40 billion, with significant contributions from countries facing currency volatility like Turkey and Brazil.

Among the top stablecoins by market cap are Tether (USDT), USD Coin (USDC), and DAI (DAI). These stablecoins are favored for their stability and are widely used for trading, remittances, and as a hedge against currency fluctuations.

Recently, PayPal introduced its own stablecoin, PYUSD, further cementing the growing importance of stablecoins in the financial ecosystem. Additionally, Tether has been innovating with its Alloy platform, which aims to improve the security and transparency of Tether (USDT) transactions.

Metric 3: Expanding DeFi Ecosystem

Total Value Locked (TVL) In DeFi Protocols

Total Value Locked (TVL) is a key metric used in the decentralized finance (DeFi) sector to represent the total value of all assets deposited in DeFi protocols. The TVL in DeFi applications rose by 17% in May 2024 , reaching $192 billion, the highest since February 2022, according to DappRadar. 

This increase is driven by Ethereum-based DeFi growth and increased trading activity. Ethereum accounts for 68% of DeFi’s overall TVL, totaling $130 billion, while Solana holds second place with a TVL of $10.9 billion (5.7% of the total) and saw a 14% month-on-month increase.

The popularity of Ethereum ETFs has also led to short-term speculation, boosting TVL. Despite this rise, the number of independent active wallets (UAW) in DeFi fell by 21% to 1.75 million, suggesting that while more value is being locked in DeFi platforms, user engagement in terms of active wallets is decreasing, indicating a correction or possible shift in user behavior or market dynamics.

Growth Of Different DeFi Sectors

In 2024, various DeFi sectors have shown growth. Lending platforms are providing essential liquidity, DEXs’ dominate trading volumes, yield farming attracts users seeking high returns, and NFTs offer new investment opportunities within the DeFi ecosystem. 

Innovation In DeFi Products And Services

Innovation in DeFi continues in 2024 with the introduction of advanced products like flash loans and decentralized insurance. 

Flash loans offer instant, unsecured borrowing, while decentralized insurance covers smart contract risks, enhancing user security and confidence in DeFi investments.

Metric 4: Rising NFT Market

Sales Volume And Market Capitalization Of NFTs

In 2024, revenue in the NFT market is projected to reach $2.378 billion , with a compound annual growth rate (CAGR) of 9.10% expected from 2024 to 2028, resulting in a projected total of $3.369 billion by 2028. 

The average revenue per user in the NFT market is estimated to be $138.8 in 2024. The United States leads globally, with the highest revenue reaching $1.122 billion in 2024. The market’s expansion is driven by increased involvement from mainstream brands and celebrities, boosting sales volumes and market capitalization.

Expansion Into New NFT Use Cases

NFTs have expanded into various new use cases, including gaming, art, collectibles, and real estate. In gaming, NFT-based assets and characters are now integral to many popular games. 

The art world has embraced NFTs, with digital artwork sales reaching new highs. Collectibles have seen substantial growth, with rare NFT items fetching millions. Additionally, real estate has begun leveraging NFTs for property sales and ownership records, showcasing the versatility and potential of NFTs in diverse sectors.

Metric 5: Regulatory Developments

Countries Embracing Cryptocurrencies As A Legal Lender

In 2024, several countries have established clear regulatory frameworks and licensing for cryptocurrencies, with some like El Salvador legalizing Bitcoin as legal tender. El Salvador’s issuance of “Volcano Bonds,” backed by Bitcoin, exemplifies this trend. Such regulatory clarity encourages adoption and integration of cryptocurrencies into mainstream financial systems.

Bitcoin ETFs And Other Crypto-Related Financial Products

The approval and launch of Bitcoin ETFs, both spot and futures, alongside Ethereum ETFs, have significantly boosted the legitimacy and accessibility of cryptocurrencies. These financial products have facilitated institutional and retail investment, driving increased market participation and stability.

Metric 6: Technological Advancements

Developments In Layer-2 Scaling And Cross-Chain Solutions

Layer-2 scaling solutions like the Lightning Network for Bitcoin and Polygon for Ethereum have improved transaction speed and reduced costs. Cross-chain solutions like Polkadot and Cosmos have enhanced interoperability, enabling seamless asset and data transfer across different blockchain networks, promoting a more interconnected ecosystem.

Additionally, Optimism and Arbitrum are notable Layer-2 solutions for Ethereum that also improve scalability and lower transaction fees, increasing the usability of the Ethereum network.

Increased Focus on Energy-Efficient Blockchain Technology

There is a growing focus on sustainability in blockchain technology, with significant strides in using renewable energy for Bitcoin mining, particularly in Africa and Canada. This shift towards energy-efficient practices aims to reduce the environmental impact of blockchain operations, aligning with global sustainability goals.

Not Dead, But Is Crypto Dying?

Despite occasional market downturns and widespread skepticism, the cryptocurrency market is far from dead. One reason people think crypto is dying is the frequent volatility and extended bear cycles, which can cause depressing price drops and create uncertainty. 

However, the steady growth in the number of wallets with positive balances, surpassing 400 million active wallets, indicates continued user adoption and interest. 

Additionally, regulatory developments, such as countries embracing cryptocurrencies as legal tender and the approval of Bitcoin and Ethereum ETFs, have bolstered legitimacy and integration into traditional finance. 

The expanding DeFi ecosystem, innovative NFT use cases, and technological advancements in layer-2 scaling and energy-efficient blockchain technology further demonstrate that the crypto market is evolving and growing, not dying.

Does Bitcoin Death = Crypto Death?

The idea that Bitcoin’s decline would signal the death of the entire cryptocurrency market is a common misconception. While Bitcoin remains the most prominent and influential cryptocurrency, the ecosystem has diversified significantly. 

The rise of DEXs, the growth of the DeFi sector, and the increasing use of stablecoins for payments and remittances illustrate a broader crypto landscape that extends beyond Bitcoin. 

Even if Bitcoin were to face significant challenges, other cryptocurrencies and blockchain projects may continue to grow subject to financial innovation.

Conclusion

In 2024, the cryptocurrency market remains well and strong, defying claims of its demise. Key metrics provided above illustrate significant growth and adoption across various areas in the space of the ecosystem. Over 400 million active wallet addresses, widespread country-wise adoption, and substantial institutional investments underscore increasing user engagement and trust. 

The DeFi sector shows strong growth with rising TVL and introducing innovations like flash loans and decentralized insurance. Furthermore, the NFT market continues to expand into gaming, art, and real estate, projecting significant revenue growth and the regulatory advancements amongst countries in regard to Bitcoin and Ethereum ETFs are creating a more legitimate space. 

Finally, technological progress, including Layer-2 scaling solutions and energy-efficient blockchain technology, further demonstrates the industry’s resilience and sustainability.

FAQs

Where will crypto be in 5 years? 

Cryptocurrencies will likely see increased adoption, integration into finance, and boast significant technological advancements versus traditional finance.

What indicates a crypto winter? 

A prolonged period of price declines, reduced trading volumes, and overall market pessimism indicates a crypto winter.

Which crypto can make me a millionaire? 

High-risk, high-reward cryptos like Bitcoin, Ethereum, or emerging altcoins could potentially offer substantial returns.

Will crypto be good in 2024? 

Yes, 2024 shows positive growth trends in adoption, transaction volume, and regulatory advancements in crypto.

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