How many people use bitcoin? It is hard to say, but there are a few data points that provide some tantalizing clues.
Bitcoin Users At a Glance
- Over 42 million bitcoin wallets had been set up globally by Dec 2019
- An estimated five percent of Americans hold bitcoin
- There are 7.1 million active bitcoin users
- Leading exchange Coinbase has over 13 million users
- Emerging markets users, who are often not considered in statistics, are
likely in the millions
Let’s unpack those numbers a bit.
42 Million Bitcoin Wallets
Currently, there are over 42 million bitcoin wallets according to data compiled by Statista. However, most bitcoin users have several bitcoin wallets and use multiple wallet addresses to increase their financial privacy when transacting in bitcoin. Hence, the total number of bitcoin users must be less than 42 million.
34 Percent Active Users
The number of people who use bitcoin actively has also increased. A report from the leading blockchain analysis company, Chainalysis, has revealed that active bitcoin users make up around a third of the total number of bitcoin owners.
The study used data collected until the month of August 2018. The researchers found that 2.3 million people use bitcoin to make payments while 4.8 million users will hold bitcoin to facilitate speculative trade of the cryptocurrency to turn a profit.
Those who use bitcoin for payments come up to 11 percent of the total bitcoin users, while speculators make up 23 percent. While these two groups actively move bitcoin from their wallets almost daily, they do so for different reasons. However, the number of active bitcoin users continues to grow.
The report also found that the number of long-term investors, also known as “HODLers,” has grown as well. This group is the largest in size, coming up to 30 percent of total bitcoin users. These are 6.4 million people who are holding bitcoin for the long-term, in anticipation of gains to be made over the years.
5 Percent of Americans Hold Bitcoin
A survey conducted by the Global Blockchain Council and SurveyMonkey that was taken by 5,000 Americans found that 60 percent of Americans have heard of bitcoin and that around five percent hold the digital currency.
If you would extrapolate that to the entire U.S. population, that would mean that an estimated 16 million Americans have invested in bitcoin.
Coinbase’s 13 Million+ Users
The most popular bitcoin wallet and exchange provider, Coinbase, reportedly has over 13 million users, which would suggest that the number of bitcoin users is somewhere between 13 million and 42 million. Given that Coinbase is available in 32 countries and that it has emerged as the go-to bitcoin wallet for newcomers, its user base number gives a better indication of how many users there are than purely analyzing wallet addresses.
Having said that, among the countries that are not serviced by Coinbase are some of the largest bitcoin economies such as China, South Korea, and Japan. Additionally, no bitcoin users in South America or Africa can use the company’s service. Given the growing number of bitcoin users in Asia, Africa, and South America who are using other wallet providers, the number of bitcoin users has to be much higher than Coinbase’s 13 million.
Bitcoin User Growth in Emerging Markets
Bitcoin trading volumes from peer-to-peer exchange LocalBitcoins suggest that bitcoin adoption is on the rise in economically troubled South American nations such as Venezuela, Brazil, and Colombia as well as in Africa as more and more young Africans are jumping on the bitcoin bandwagon as a way to generate an income.
In South Africa, for example, “the number of new users trading bitcoin through eToro rose by 671 percent from January to the end of November last year over the same period in 2016, more than the 574 percent overall growth,” according to eToro analyst Mati Greenspan.
Furthermore, three African nations – South Africa, Ghana, and Nigeria – are among the top five countries to search for the keyword bitcoin according to Google Trends data.
So, How Many People Use Bitcoin? Here’s the Math!
In light of the limited data and the impossibility of accurately determining the number of bitcoin users around the world, we can safely estimate that there will be around 25 million users globally.
This figure can be derived by assuming that out of the 42 million bitcoin wallet addresses on the blockchain, several are no longer in use and that many users occupy several wallets. On the other hand, we can also assume that the number of bitcoin users outside of the 32 countries that Coinbase services will be several million – especially since major bitcoin economies in Asia are not included. Hence, around 25 million bitcoin users globally can be considered a fair estimate.
The majority of these users will be private buy-and-hold investors who want to capitalize on the potential future price increase of the digital currency. In terms of actual day-to-day users of bitcoin as a spending currency, the number will be much smaller.
Bitcoin as Spending Currency Vs. Other Payment Methods
While bitcoin’s popularity exploded in 2017, the actual number of bitcoin users globally is still rather small compared to users of other payment systems such as Paypal or credit cards.
While active bitcoin users are estimated at 5.8 million, PayPal boasts 235 million active users, Mastercard has 35.7 million American users and another 604 million active international users, and Visa accounts for a whopping 336 million American users and another 736 million users globally.
What We Know
What we know, however, is that bitcoin’s popularity is expanding around the globe, meaning that this digital currency is likely here to stay.
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