The crypto market was in a bear market for most of 2022. However, a new report has revealed that the total number of global crypto owners increased during the year by 39%. This number rose from 306 million in January to 425 million as the year ended.
ETH had a higher adoption rate than BTC
While the number of crypto owners increased globally, Crypto.com notes in the report that ethereum recorded a higher adoption rate than bitcoin. Over the year, ethereum amassed 263% more owners, with 24 million recorded in January and 87 million in December, which was 20% of all the total crypto owners.
Comparatively, bitcoin saw 20% growth from 183 million in January to 219 million in December, which is 52% of the global crypto owners.
The significant adoption experienced by ethereum was majorly attributed to The Merge, which went live last September. The Merge shifted the consensus algorithm on the Ethereum blockchain from proof-of-work to proof-of-stake.
Another reason could have been the increased interest from institutional investors, as Crypto.com’s report states. That, coupled with the NFT momentums and increased interest in the ETH liquid staking, led to ethereum’s higher adoption over bitcoin.
Hence, the ethereum adoption rate rose from 8% to 20% during the year, but the most significant rise was around August and September. On the other hand, bitcoin’s adoption rate spiked in April but gradually dropped to 52% by the year’s end.
Increased mainstream adoption saw BTC’s rise
Despite having a lower adoption rate than ethereum, bitcoin still increased. Its 219 million adopters accounted for more than half of the global crypto owners.
The heightened adoption was likely contributed by the Central African Republic (CAR) adopting BTC as a legal tender. The move made them the second country, after El Salvador, to make the crypto a legal tender, allowing its use for transactions.
Goldman Sachs’s offering of its first BTC-backed loan might have further led to more adoption.
In addition, there was a rise in adoption during the FIFA World Cup Qatar 2022. Around that time, there was also a spike in financial institutions that offered crypto services to their customers. These included institutions such as MoneyGram, UnionBank of the Philippines, and Fidelity.
Over that year, both ethereum and bitcoin dropped in price. ETH dropped over 68%, while BTC dropped 65% after several exchanges collapsed and stablecoins depegged, causing mistrust in the crypto market.