Coin Metrics' State of the Network: Issue 120

Tuesday, September 14th, 2021

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Measuring Crypto Usage and Adoption

By Nate Maddrey and Kyle Waters

Crypto usage can be tricky to measure. Although all transaction data is public, it can be difficult to tell how many unique users are behind the transacting addresses. A single Bitcoin or Ethereum address may be owned by many individuals, such as an exchange address or multisig wallet. But an individual may also own many addresses for security, privacy, or other purposes.

‘Monthly active users’ is commonly used to track the amount of 30-day unique users of apps and social media networks. Most apps require an email login (or equivalent) so are able to get a relatively accurate measurement of the unique number of users. Although due to its pseudonymous nature crypto doesn’t have an exact equivalent, our recently introduced monthly active addresses metric serves as an interesting proxy. Monthly active addresses measures the amount of unique addresses that either sent or received a transaction over the previous 30 days. 

Unique monthly active users of large-cap cryptos and the major stablecoins reached a peak in mid-May before the market wide crash. But it's started to rebound since mid-July as the market recovers. 

Source: Coin Metrics Network Data Charts

BTC’s monthly (30-day) unique active addresses peaked at a little over 22.1M on January 15th of this year. Weekly (7-day) unique active addresses, shown on the right-hand axis, peaked on January 7th but also spiked on May 8th, topping 6.7M on both occasions.

Monthly unique active addresses dropped as low as 14.3M in mid-July following the Chinese government crackdown on Bitcoin mining and investing, which led to a miner migration out of China. But it has been rebounding since and climbed back above 16.5M. 

Source: Coin Metrics Network Data Charts

ETH monthly active addresses topped a little over 13M on May 18th following the first NFT boom and ETH price surging past $4K. It has since dropped to a low of 6.8M, although it has had some weekly spikes likely related to NFT drops. But the downward trend appears to have started to reverse in early September, and has climbed back above 7M as of September 11th. 

Source: Coin Metrics Network Data Charts

Stablecoin weekly active addresses peaked in mid-May as the crypto markets crashed. They decreased until mid-July but, similar to BTC addresses, have started to recover with the market. Tether is still by far the largest stablecoin in terms of weekly active addresses. Tether issued on Tron, in particular, has accounted for a majority of stablecoin weekly active addresses over the past six months. 

Source: Coin Metrics Network Data Charts

Another way to measure user adoption is to look at the unique number of addresses holding crypto. The following chart shows the number of addresses holding at least one ten-billionth (> .00000001%) of total supply of various cryptoassets in order to filter out empty addresses.

The sample of large-caps and stablecoins shown in the chart below topped 50M unique addresses in early September, topping May’s high. 

Source: Coin Metrics Network Data Charts

Since the start of 2021 BTC and ETH have both had an increase in the number of addresses holding at least one ten-billionth of total supply. Most of BTC’s growth came in the beginning of the year, adding over 1.5M addresses by mid-April. But ETH has surged since the summer, adding over 2.5M addresses since May 1st. Despite the decline in monthly active addresses, ETH holders have increased at a relatively fast pace since May.

Source: Coin Metrics Network Data Charts

After dropping following the crash, stablecoin adoption is also now back above pre-crash levels. As of September 11th, there are 7.5M addresses holding at least $1 worth of stablecoins, a new all-time high. 

Source: Coin Metrics Network Data Charts

To follow the data used in this piece and explore our other on-chain metrics check out our free charting tool, formula builder, correlation tool, and mobile apps.

Network Data Insights

Summary Metrics

Source: Coin Metrics Network Data Pro

Network usage dipped a little over the past week following last week’s flash crash. Although BTC active addresses dropped to a 7-day average of 745.6K, adjusted transfer value increased by 21.6% for a daily average over $10.1B. ETH active addresses increased by 5.6% on the week as transaction fees began to dip. With L2 solutions like Arbitrum gaining traction, and NFT season dying down, ETH fees may continue to decline back towards pre-August levels. Stablecoins have also seen a usage increase after the crash, with USDC active addresses growing by 20% week-over-week. 

Network Highlights

Over one third of ETH miner revenue was generated from fees on September 6th, the highest daily level since May of this year. The percent of ETH miner revenue from fees fell somewhat after the introduction of EIP-1559’s new burnt base fee, but has risen a little since. Priority fees (miner tips) have likely increased as a result of higher market volatility and continued NFT mania. 

Source: Coin Metrics Network Data Charts

Daily Bitcoin miner revenue has recovered as BTC’s price appreciated from July lows. Total Bitcoin miner revenue has averaged ~$47M per day over the last month, ~88% higher than the average daily revenue in June. However, the percentage of daily mining revenue from fees has averaged ~1.5% over the last 30 days, a relatively low percentage compared to the rest of 2021 so far. 

Source: Coin Metrics Network Data Charts

After a few months of flat to low growth, stablecoin supply growth has started to pick up again. Total supply is nearing 120B with over 4B added since September 1st alone, much of which can be attributed to Tether. 

Source: Coin Metrics Network Data Charts

Coin Metrics Updates

This week’s updates from the Coin Metrics team:

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