Crypto Usage and Activity Hits All-Time High, a16z Report Says

The latest edition of venture capital firm Andreessen Horowitz’s (a16z) annual State of Crypto report has found crypto usage is at an all-time high, having seen massive increases in the 12 months since the last report. 

According to the report, in September of this year approximately 220 million addresses interacted with some variety of blockchain, an increase of over 300% since the end of 2023. However, the report also points out that users often have many accounts — overall the report estimates there are between 30 – 60 million active monthly crypto users worldwide.

The report attributes much of this increase in activity to Solana, which accounted for 100 million of the 220 million addresses. It should be noted that a16z is a major investor in Solana, having led a private token sale of SOL in 2021 valued at over US$300 million.

The report posits that crypto has become an important political issue in the lead up to  this year’s presidential election and stablecoins have finally found a product-market fit, becoming one of blockchain tech’s ’killer apps’.

Related: Solana Leads 2024 Token Launches, Capturing Over 87% in Recent Surge

Increase In Usage Led By Solana, Near, And Ethereum L2s

The report identifies Solana as the largest contributor to monthly active addresses with 100 million, NEAR came in second with 31 million, followed by Coinbase’s Ethereum layer-2, Base with 22 million. Tron (14 million) and Bitcoin (11 million) rounded out the top five largest contributors. 

It also found that Solana leads in terms of software developer growth, with 11.2% of founders telling a16z they either are building on Solana, or plan to in the next 12 months, up from 5.1% last year. A disclaimer on the firm’s ‘Builder Energy Dashboard’ page states “please note this does not include all builders or founders, only those interviewed by a16z.” Given a16z’s close ties to the Solana ecosystem this could potentially be skewing the results here. 

In absolute terms, Ethereum remains the most popular choice for builders, at 20.8%, but its growth has almost stalled — only increasing 1.1% in the past year.

Mobile Wallet Use Up, Driven By Growth In Nigeria, India, Argentina

Mobile wallet use was up substantially year-on-year, hitting a record high of 29 million monthly users in June of this year. 

While the US still makes up the largest share of mobile wallet users, at 12%, its contribution has been declining for several years. Much of the overall growth is now coming from other countries including:

• Nigeria, whose government has implemented a crypto-friendly regulatory framework, 
• India, whose population is rapidly adopting cell phones and 
• Argentina, where crypto has become an alternative to the country’s struggling fiat currency.

Search Trends Linked to Political Influence

The report looked at Google search trends that indicate the level of interest in crypto has surged, particularly in some of the key battleground states in this year’s US election. Search data showed that the swing states, Pennsylvania and Wisconsin, which will be crucial in determining the election outcome, have seen the fourth and fifth largest growth in crypto-related searches since 2020. 

The growing utility and importance of stablecoins was also highlighted, with the report noting that improvements in Ethereum layer-2 networks have led to transaction cost reductions of up to 99%, massively expanding the potential usefulness of stablecoins.

Related: Base Blockchain Shatters Records: Over 2 Million Daily Transactions As Coinbase’s Layer-Two Platform Sees Unprecedented Activity

According to the report, the average gas fee on Ethereum layer-2s in the past month was $1, down from $12 in 2021. On Coinbase’s layer-2, Base, sending USDC cost on average under US$0.01 in gas fees, although some other transaction fees may apply — still even with some additional fees it compares very favourably with the US$44 it costs on average to send an international wire transfer.