Researchers at Andreessen Horowitz (a16z), a prominent venture capital firm in the cryptocurrency sector, estimate that millions of “real” crypto users exist monthly. Accurately calculating the number of crypto users can be challenging, as individuals often create multiple addresses for reasons such as security or airdrop scanning.
Counting Crypto Users
The researchers filtered out addresses that receive funds from distribution contracts and automatically distribute to various other addresses. They also excluded addresses with nearly zero balance at the beginning and end of September that engaged in numerous transactions in a short period. A critical aspect of the comprehensive analysis was minimizing the number of addresses belonging to the same users, recognizing that users can have multiple addresses across crypto networks and use various exchanges simultaneously.
Potential User Base
Eddie Lazzarin and Daren Matsuoka attempted to make specific predictions using both on-chain and off-chain data sources. They noted that while users interacting through interfaces can handle a reasonable number of transactions within a specific timeframe, bots can operate at much higher frequencies.
“Users using interfaces can process only a reasonable number of transactions over time, whereas bots can operate at higher rates.”
As a result of their analysis, a16z researchers identified that there are currently 30-60 million genuine monthly crypto users. This figure represents about 14-27% of the 220 million monthly active addresses measured in September.
Moreover, this number corresponds to only 5-10% of the 617 million global crypto owners reported by Cryptocom in June. This disparity suggests a significant opportunity exists.
As new and exciting applications and consumer experiences become possible through significant infrastructure improvements, the potential for converting existing crypto investors into active users could increase.
The research emphasizes that innovative applications and improved infrastructure could lead to re-engagement of existing passive crypto investors, which might be a crucial step for growth and expansion of the user base in the sector.
