The number of addresses on the Bitcoin network has hit a new all-time high of 28.39 million, surpassing a previous high established in late 2018 after the market endured a year-long bear market.
According to data from blockchain analytics firm Coinmetrics, the number of bitcoin wallets in existence was growing steadily since BTC was first created and during its first nine years. It hit a high in late 2018 but the total number of addresses soon started dropping, until it hit a low of roughly 21 million.
The total number of bitcoin addresses that hold any amount of BTC has hit an all-time high at 28.39M addresses, surpassing the previous ATH of 28.38M (achieved on 1/10/18). (Data via @coinmetrics Pro)— Alex Thorn (@intangiblecoins) December 6, 2019
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The number of addresses then started growing again until it reached its current all-time high. Cryptocurrency investors Alex Thorn spotted the trend, and noted the calculating the total number of BTC addresses is “one of the best proxies we have to approximate the total number of individual bitcoin users.”
As Thorn noted, it’s extremely hard to determine how many users bitcoin itself has. A unique address, according to experts, should be used for every bitcoin transaction for security purposes, which means one single user can have as many as a thousand addresses. The metric, as such, may “overcount the total number of individual bitcoin users.”
On the other hand, Thorn pointed out that a lot of users keep their coins with custodians and cryptocurrency exchanges, which hold customer funds in single addresses, which could mean the metric undercounts the total number of users.
As a lot of investors buy BTC directly from cryptocurrency exchanges and simply keep their funds there, Thorn concluded the total number of addresses with a balance on the network will likely undercount the total number of bitcoin users. As such, their growing number “can be viewed as an indicator of growing bitcoin adoption.”
8/8 In sum, while not perfect, the “addresses w/ any balance” metric is one of the best on-chain metrics we have for approximating the total number of bitcoin users, and its increase over time can be be viewed as an indicator of growing bitcoin adoption.— Alex Thorn (@intangiblecoins) December 6, 2019
It’s noting that a recent report published by brokerage giant Charles Schwab has shown that millennials, currently aged 25-39, prefer to invest in products tied to bitcoin over equity in some of the world’s largest companies, including Warren Buffet’s Berkshire Hathaway, Walt Disney, and Netflix.
Featured image via Unsplash.