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The year 2023 witnessed substantial expansion in the cryptocurrency realm, defying macroeconomic challenges.
A detailed report from Crypto.com illuminates this growth, revealing a remarkable 34% surge in the global cryptocurrency user base. The year commenced with 432 million users and concluded with an impressive 580 million, demonstrating the crypto market's resilience despite monetary tightening by Western central banks, geopolitical conflicts, and the lingering impacts of the pandemic.
Bitcoin and Ethereum Propel Growth
Bitcoin (BTC) and Ethereum (ETH) emerged as the main catalysts behind this surge, sustaining their positions as the cornerstones of the cryptocurrency market. Bitcoin ownership experienced a 33% uptick, climbing from 222 million to 296 million users. Meanwhile, Ethereum saw a robust 39% increase in its user base, growing from 89 million to 124 million. These figures underscore the increasing acceptance and diversification within the cryptocurrency space.
According to The Block, several factors contributed to this growth trajectory. For Bitcoin, the advent of exchange-traded funds (ETFs) and the introduction of the Bitcoin Ordinals protocol, facilitating non-fungible token (NFT) minting on the Bitcoin network, played pivotal roles. Ethereum's growth was propelled by the Shanghai Upgrade, which introduced liquid staking and enabled the withdrawal of staked ETH, thus fostering broader adoption.
Overlapping Ownership and Investment Diversification
The report delves into ownership patterns, revealing that 40.9% of Bitcoin owners also hold Ethereum, emphasizing a trend toward diversification in cryptocurrency investments. Additionally, the data indicates that 42% of cryptocurrency users do not possess either Bitcoin or Ethereum, showcasing a broader spectrum of investment choices within the crypto landscape.
According to Dales Report, Crypto.com's report amalgamates on-chain data with various parameters to estimate global cryptocurrency ownership. While comprehensive, the methodology acknowledges limitations, including potential inaccuracies in capturing over-the-counter (OTC) trading and users with no on-chain transaction history. Despite these constraints, the report provides a valuable snapshot of the dynamic cryptocurrency landscape in 2023.
In conclusion, 2023 stands out as a year of robust growth for the cryptocurrency sector, with a notable surge in global users driven by the increased adoption of Bitcoin and Ethereum. This expansion, resilient in the face of economic and geopolitical challenges, underscores the growing mainstream acceptance and adaptability of cryptocurrencies.
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