What Happened: Global crypto adoption surged by 15.7%, with over 106 million crypto users in January 2021, according to research from Crypto.com
Analysts from the cryptocurrency exchange claim that this increase in adoption was largely influenced by Bitcoin (CRYPTO: BTC) adoption after its price skyrocketed earlier this year.
This wasn’t the only contributing factor, as adoption rates appeared to pick up most during the latter half of 2020, following Paypal Holdings Inc (NASDAQ: PYPL) opening crypto purchases to investors and the more extensive institutional adoption seen by Tesla Inc‘s (NASDAQ: TSLA) $1.5 billion Bitcoin purchase.
Why It Matters: This year marks the first time that global crypto adoption has surpassed 100 million users.
“What we notice is that periods of strong growth come after periods of strong price performance in Bitcoin,” said the analysts at Crypto.com.
According to them, Bitcoin’s rally was fuelled by existing users, but it was the new users that sustained its price.
While months prior to January 2021 saw the growth in new users increase by less than a single percentage point, new users increased by over 15% in January alone.
What Else: Interestingly, Bitcoin wasn’t the only driver of crypto adoption, despite the fact that its recent rally made waves across the globe.
Statistics show that the second-largest cryptocurrency by market cap, Ethereum, led the crypto market’s growth in August 2020, during the height of the DeFi mania.
Both Bitcoin and Ethereum dipped sharply today below crucial support levels, with Bitcoin under $50,000 and Ethereum under $1,500.
According to the Fear and Greed index, we are still in extreme greed!
94 out of 100
Get that number down real quick! pic.twitter.com/Ew0x4g3TK4
— DEFI TIMES (@defitimes) February 23, 2021
Despite the selloff, market sentiment was still far from all round panic, as the crypto fear and greed index depicted extreme greed.
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