The digital asset landscape is becoming increasingly mainstream, as detailed in the annual “State of Cryptocurrencies” report published by venture capital firm Andreessen Horowitz.
He crypto/2024/10/16/andreessen-horowitz-says-crypto-activity-reached-all-time-high-in-2024/” target=”_blank” rel=”noopener nofollow”>report emphasizes the growing international stablecoin market, maturing infrastructure, and a notable decrease in transaction fees, all of which contribute to an increase in crypto activity throughout the year.
Active Monthly crypto Addresses Increase to 220 Million
Eddy Lazzarin, CTO at Andreessen Horowitz, stated: “crypto activity is at an all-time high,” indicating significant growth across multiple dimensions of the market.
The report, released Wednesday, classifies crypto activity into three main segments: users, owners, and active crypto addresses.
While the category of “owners” refers to people who own digital assets without necessarily interacting with the block chain“Users” are those who actively use blockchain technology for transactions such as purchasing non-fungible tokens (nfts) or transferring Circle's USDC stablecoin.
Notably, only a small percentage (between five and ten percent) of cryptocurrency owners are classified as active users.
However, the report also reveals a notable increase in monthly active addresses, which skyrocketed to 220 million in 2024, a substantial increase from less than 100 million in 2023.
According to the company's analysis, this growth trajectory reflects the beginnings adoption patterns observed during the nascent stages of the Internet.
Furthermore, the total number of cryptocurrency owners globally has reached 617 million, while the number of active users ranges between 30 and 60 million.
Lazzarin attributes the disparity between owners and active users to “the complex user experience,” suggesting that improving app usability, reducing costs, and achieving regulatory clarity could attract passive cryptocurrency owners again.
Is decreasing transaction fees key to growth?
Stablecoins have found what Lazzarin describes as “product-market fit.” The report notes that 32% of daily crypto activity is now driven by stablecoins, surpassing all categories except decentralized finance (DeFi).
This growth has been especially pronounced in countries facing hyperinflation, such as Argentina, where the local peso depreciated by 82%. In response, Lazzarin explains that many Argentines have resorted to stablecoins to “safeguard” their assets, leading to a 10,000% increase in stablecoin trading on the Mexican exchange Bitso.
Declining transaction fees have fueled this record activity in the digital asset space. The report highlights how advances in ethereum scaling solutions have reduced the cost of sending dollars internationally by 99%.
While traditional international bank transfers typically generate fee of around $44, transferring USDC through Coinbase's Base Layer 2 solution costs less than a cent.
Ultimately, the report attributes this cost reduction to a “matured” digital asset infrastructure, including new blockchains and greater interoperability.
At the time of writing, the total crypto market capitalization stands at $2.27 trillion, with approximately $250 million of fresh capital injected into the digital asset ecosystem over the last 5 days.
Featured image of DALL-E, chart from TradingView.com
