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Research and Insights

Head of Research and Insights
Henry Hon
PhD, CFA

Research Manager
Kevin Wang

Senior Research Analyst
Michael Bolger

Research Analyst
William Wu PhD

Research Editor
Joy Zhou

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RESEARCH DISCLAIMER
This report alone must not be taken as the basis for investment decisions. Users shallassume the entire risk of any use made of it. The information provided is merelycomplementary and does not constitute an offer, solicitation for the purchase or sale ofany financial instruments, inducement, promise, guarantee, warranty, or an official
confirmation of any transactions or contract of any kind.
The views expressed herein are based solely on information available publicly, internal
data or information from other reliable sources believed to be true. This report includes
projections, forecasts and other predictive statements which represent Crypto.com’s
assumptions and expectations in the light of currently available information. Suchprojections and forecasts are made based on industry trends, circumstances andfactors involving risks, variables and uncertainties. Opinions expressed herein are ourcurrent opinions as of the date appearing on the report only.
No representations or warranties have been made to the recipients as to the accuracy
or completeness of the information, statements, opinions or matters (express orimplied) arising out of, contained in or derived from this report or any omission fromthis document. All liability for any loss or damage of whatsoever kind (whetherforeseeable or not) which may arise from any person acting on any information andopinions contained in this report or any information which is made available inconnection with any further enquiries, notwithstanding any negligence, default or lackof care, is disclaimed.
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except with the written permission of Crypto.com. Persons into whose possession thereports may come are required to observe these restrictions.

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Contents
Executive Summary5

1. Introduction

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2. Results

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BTC Calculation Table

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ETH Calculation Table

9Final Aggregation

9Trends10

3. Global Crypto Users to Reach 1 Billion by the End of 2022

174. Limitation and Caveats

18References

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Executive Summary

5●

We expect the number of global crypto owners to reach 1 billion by theend of 2022. Global crypto population has increased by +178% in 2021, risingfrom 106 million in January to 295 million in December.

●The overall adoption growth in the second half of 2021 is 37.5%, 13% higher
than the same period in 2020 (33.3%), suggesting an accelerated adoption rateyear-on-year.

●Unlike the trend of the first half 2021, Bitcoin drove the growth andoutperformed Ethereum adoption in the latter half. Bitcoin also gained market
share during Q3-Q4 from altcoins.

●The weakness of Ethereum adoption may result from the emergence ofEthereum competitors like Terra and Avalanche together with the Layer 2solutions that bridged assets away from Ethereum to other chains.

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1. Introduction
We have regularly updated our on-chain market sizing estimates to witness theworld transition toward cryptocurrencies since the first edition of ‘MeasuringGlobal Crypto Users’ in June 2020. The report’s updated methodology combines
on-chain data with blended parameters to estimate the number of global crypto
owners. The crypto adoption reached milestones with the number of crypto
owners at 106 million (January 2021), 221 million (June 2021) and 295 million(December 2021).
Crypto adoption was remarkable in the first half of 2021. Heavyweight institutions,such as Tesla and Mastercard, took steps to embrace cryptocurrency. In March,
Visa collaborated with Crypto.com to settle payments in crypto. Furthermore, ElSalvador introduced legislation that will make it the world’s first sovereign nation
to adopt Bitcoin as legal tender.
In the second half of 2021, crypto adoption remained sustainable. The overalladoption growth in the second half of 2021 was 37.5%, 13% higher than in
the same period in 2020 (33.3%). There was more and more discussion of crypto
in the community (e.g. ‘The ₿ Word’ event), which functioned as a catalyst for thewider public. Furthermore, institutional adoption also allowed their clients todiversify assets. In summary, crypto cannot be ignored.
In this report, we dynamically updated the parameters below. If you are interested
in learning more about the methodology, please view the previous report here.

6Item

Description

𝑟𝐵𝑇𝐶 𝑑𝑒𝑝𝑜𝑠𝑖𝑡

The rate of users depositing BTC from one exchange to another𝑟𝐸𝑇𝐻 𝑑𝑒𝑝𝑜𝑠𝑖𝑡

The rate of users depositing ETH from one exchange to another

𝑟𝐵𝑇𝐶&𝐸𝑇𝐻

The ratio of users holding both BTC and ETH

𝑟𝐵𝑇𝐶&𝐸𝑇𝐻

The ratio of users owning neither BTC nor ETH

Exchanges

The exchanges included in our on-chain data extraction

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Crypto.com|The exchanges included in our methodology are:Exchange

Logo

Crypto.com
Binance
Bitfinex
Bittrex
BitMaxBithumb
Bitstamp
Gemini
Huobi
KrakenKuCoinOKEx
LiquidBitFlyerGate.io
Zaif
Poloniex
UPbit
BitMEX
DeribitFTX
itBit
HitBTC
Bybit

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Crypto.com|82. Results
The following tables list the results of calculations for Bitcoin and Ethereum
adoption rates as of December 2021.

BTC Calculation Table

8Step

Parameter (BTC)

Notation

Result(1)User deposit rate

𝑟𝑑𝑒𝑝𝑜𝑠𝑖𝑡

17.5%

(2)

Total no. of on-chain overlappingaddresses

𝑁𝑜𝑛−𝑐ℎ𝑎𝑖𝑛 𝑜𝑣𝑒𝑟𝑙𝑎𝑝𝑝𝑖𝑛𝑔 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠

65,611(3)

Total no. of on-chain addresses(selected exchanges)

𝑁𝑒𝑥𝑐ℎ𝑎𝑛𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠

28,432,206(4)No. of on-chain non-overlappingaddresses(5)

Weighted-average no. of exchanges
per user𝑘𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠 𝑝𝑒𝑟 𝑢𝑠𝑒𝑟

3.36

(6)

Selected exchanges’ coverage ratio

𝑟𝑡𝑜𝑡𝑎𝑙 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒

92%

(7)

Total no. of BTC owners[(2)÷(5)+(4)](1)×(6)~ 176 Mln

𝑁𝑜𝑛−𝑐ℎ𝑎𝑖𝑛 𝑛𝑜𝑛−𝑜𝑣𝑒𝑟𝑙𝑎𝑝𝑝𝑖𝑛𝑔 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠=(3)-(2)28,366,595

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Crypto.com|ETH Calculation Table
StepParameter (ETH)

Notation

Result(1)

User deposit rate

𝑟𝑑𝑒𝑝𝑜𝑠𝑖𝑡

25.5%

(2)

Total no. of on-chain
overlapping addresses

𝑁𝑜𝑛−𝑐ℎ𝑎𝑖𝑛 𝑜𝑣𝑒𝑟𝑙𝑎𝑝𝑝𝑖𝑛𝑔 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠

10,391(3)

Total no. of on-chain addresses(selected exchanges)

𝑁𝑒𝑥𝑐ℎ𝑎𝑛𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠

5,434,617(4)No. of on-chain
non-overlapping addresses(5)

Weighted-average No. ofexchanges per user

𝑘𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠 𝑝𝑒𝑟 𝑢𝑠𝑒𝑟

3.36

(6)

Selected exchanges’ coverage
ratio

𝑟𝑡𝑜𝑡𝑎𝑙 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒

92%

(7)

Total no. of ETH owners[(2)÷(5)+(4)](1)×(6)~ 23 Mln

𝑁𝑜𝑛−𝑐ℎ𝑎𝑖𝑛 𝑛𝑜𝑛−𝑜𝑣𝑒𝑟𝑙𝑎𝑝𝑝𝑖𝑛𝑔 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑠=(3)-(2)5,424,226

Final Aggregation

9StepEstimates

Notation

Result(1)

BTC owners

𝑁𝐵𝑇𝐶 𝑜𝑤𝑛𝑒𝑟𝑠~ 176 Mln

(2)

ETH owners

𝑁𝐸𝑇𝐻 𝑜𝑤𝑛𝑒𝑟𝑠~ 23 Mln(3)

BTC & ETH overlap rate

𝑟𝐵𝑇𝐶&𝐸𝑇𝐻

23.0%

(4)

Rate of the users own neither BTC nor ETH

𝑟𝐵𝑇𝐶&𝐸𝑇𝐻

47.0%

(5)

Exchange adoption rate

𝑟𝑒𝑥𝑐ℎ𝑎𝑛𝑔𝑒

89%

(6)

Overall crypto population(1)+(2)[1+(3)−(4)]×(5)~ 295 Mln

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9Crypto.com|10Trends
Now, we look at how the crypto population has trended in the second half of2021. We observed that August was an exceptionally strong month with a highcrypto user growth rate of 15.2%, and this helped to drive Bitcoin’s subsequentstellar performance.

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There are several interesting things to note when the data are broken down into
Bitcoin and Ethereum users. Bitcoin users grew by 37.5% from 128 million in
July to 176 million in December; while around 23 million users held Ethereum
and the rate increased by only 1.4% during the period.

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Bitcoin adoption was strong in July and August, boosted by the ‘The ₿ Word’ event
and PayPal’s provision of crypto service in the U.K. respectively; while it dropped
briefly in September resulting from the restrictions on cryptocurrency trading insome nations. The first U.S. Bitcoin ETF from ProShares then contributed to Bitcoin
adoption in October.

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The development of Ethereum’s adoption lagged behind Bitcoin’s. The number ofEthereum users remained steady at around 23 million and increased by only 1.4%
from July to December. The rate was also dwarfed by the overall growth in the firsthalf of 2021 (64%). This may result from the various EVM compatible blockchains,
emerging L2 solutions, and bridged assets away from Ethereum to those new
blockchains.

However, the trends of Ethereum adoption was in tandem with the growth ofglobal Ethereum addresses.

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When checking the composition of crypto owners, we found that Bitcoin gained
market share from 51% in June to 63% in October (its market share dropped from67% to 51% in the first half) but decreased again in November, while Ethereumwas continuously losing market share this year from 13% in January to 8% inDecember.

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3. Global Crypto Users to Reach 1
Billion by the End of 2022
Nations can no longer afford to ignore the growing push towards crypto by thepublic. We may in many cases expect a friendlier stance towards the cryptoindustry:●We expect developed nations to devise clear legal and taxation
frameworks for crypto assets.

●In parallel, more nations facing a highly inflationary economy anddepreciating currency may adopt cryptocurrency as legal tender,
following the example of El Salvador.

According to our latest research, there were 295 million crypto users
worldwide as of 29 December 2021.

In 2021, the number of global crypto owners almost tripled, from 106 million in
January to 295 million in December. If we extrapolate a similar rate of increase in
2022, we are on track to reach 1 billion crypto users by the end of 2022.

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4. Limitation and Caveats
Our analysis is built on a combination of Bitcoin and Ethereum on-chain data,
survey analysis, and Crypto.com’s own internal data. While we believe that ourupdated methodology presents a more accurate estimate than our previousversion, it is still subject to the following limitations and caveats:17●

Our method assumed that all on-chain users still own crypto today, but it’s
likely that some may have already sold their holdings.

●We assumed that all the selected exchanges use the same deposit
sweeping flows, but we did our best to remove exchanges that use
different flows.

●

OTC trading and users who have never made on-chain transactions may
not be effectively captured.

●Sub-accounts in exchanges may not be accurately reflected.

●

Parameters obtained by survey may change over time.

●

Since all parameters are at least partially sourced from Crypto.com users(either by survey or internal data), sampling bias is inevitable.

●The result has dependency on the third-party tools and data that we used.

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Crypto.com|18References
Browne, Ryan. “PayPal crypto service launches in the UK.” CNBC, 22 August 2021,
https://www.cnbc.com/2021/08/22/paypal-crypto-service-launches-in-the-uk.html.
Dwyer, Kevin. “The ₿ Word Conference Recap: The Big Message from Elon Musk, Jack
Dorsey, Cathie Wood, and More.” CoinMarketCap, July 2021,
https://coinmarketcap.com/alexandria/article/the-b-word-conference-recap-the-bi
g-message-from-elon-musk-jack-dorsey-cathie-wood.
Hussain, Noor Zainab. “EXCLUSIVE Visa moves to allow payment settlements using
cryptocurrency.” Reuters, 29 March 2021,
https://www.reuters.com/business/autos-transportation/exclusive-visa-moves-allo
w-payment-settlements-using-cryptocurrency-2021-03-29/.
John, Alun, et al. “China's top regulators ban crypto trading and mining, sending bitcoin
tumbling.” Reuters, 24 September 2021,
https://www.reuters.com/world/china/china-central-bank-vows-crackdown-cryptoc
urrency-trading-2021-09-24/.
Mccrank, John. “U.S. futures-based bitcoin ETF rises in first day of trading, bitcoin nears
record.” Reuters, 19 October 2021,
https://www.reuters.com/technology/bitcoin-nears-record-high-ahead-futures-etf-l
isting-2021-10-19/.
Sigalos, MacKenzie. “El Salvador looks to become the first country to adopt bitcoin aslegal tender.” CNBC, 7 June 2021,
https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html.
Wang, Kevin. “Measuring Global Crypto Users: A Study to Measure Market Size Using
On-Chain Metrics.” Crypto.com, July 2021,
https://crypto.com/research/article?category=data&page=on_chain_market_sizing_july.
Wang, Kevin. “On-Chain Market Sizing.” Crypto.com, June 2020,
https://crypto.com/research/article?category=data&page=on-chain-market-sizing.
Wang, Kevin. “On-Chain Market Sizing (January 2021).” Crypto.com, February 2021,
https://crypto.com/research/article?category=data&page=on_chain_market_sizing.

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