More than 106 million people worldwide use cryptocurrencies. The influx of new users has fueled the growth of the cryptocurrency market and leading crypto assets.
More than 106 million people worldwide use cryptocurrencies, according to a Crypto.com exchange report released this week. Exchange analysts note an increase in the number of cryptocurrency users by 15.7% in January alone. While the latest BTC rally was driven by existing users, it was the new owners of the cryptocurrencies that helped keep the price high, according to the report.
According to the study, which included data from 24 cryptocurrency exchanges, the rapid rise in the price of BTC was the main driver for the increase in the number of users of cryptoassets.
Cryptocurrency market growth in 2020. Source: Crypto.com
In addition, the growth of the market has been influenced by the popularity of Decentralized Finance (DeFi), a new ecosystem that uses blockchain to provide financial services without intermediaries.
In the fall of 2020, the number of new Ethereum users grew faster than Bitcoin. Source: Crypto.com
Crypto.com data also shows that Ether, the second-largest cryptocurrency by market capitalization, contributed to the growth of the cryptocurrency market in August 2020, which coincides with the peak of the DeFi boom.
Increased investment from institutional investors such as Microstrategy, Square and Tesla has become another major driver of market growth. After PayPal began offering its customers the ability to buy and sell cryptocurrencies at the end of 2020, the market’s growth rate has also increased significantly.
In a separate report released last week, Statista suggested that Nigeria is leading the way in new cryptocurrency user inflows. Every third respondent answered that in 2020 he used or owned cryptocurrencies. According to Google Trends, Nigeria also dominates search traffic for the keyword bitcoin.
The popularity of cryptocurrencies is growing in Southeast Asia as well. According to Statista, 20% of survey respondents in Vietnam said they had used cryptocurrencies in the past year, despite the central bank’s refusal to recognize the asset class as a legal payment instrument.