New analysis from River Intelligence reveals that Bitcoin is at present within the early phases of adoption, suggesting that the massive issues are but to come back. For example, River outlines that the present Bitcoin adoption degree is akin to that of the Web in 1990 or social media in 2005.
On Feb. 25, 2025, a Bitcoin-only establishment River Monetary Inc., launched a research entitled “What’s Driving Bitcoin Adoption in 2025?” The report covers subjects corresponding to the present state of the Bitcoin protocol, the Lightning Community progress points, the specifics of the most recent bull market, the Bitcoin custody panorama, and extra.
Desk of Contents
Adoption is within the early phases
Increasingly governments are embracing Bitcoin, the report exhibits. Whereas China, Afghanistan, and Venezuela’s crypto insurance policies stay prohibitive, different international locations are adopting crypto-friendly laws, and by 2024, their quantity had elevated, with Russia and Bolivia legalizing Bitcoin mining, Argentina and Turkey legalizing Bitcoin funds, and plenty of different international locations permitting funding in BTC or Bitcoin ETFs, and many others. As of 2024, 18 international locations owned bitcoins by way of government-backed mining, seizures, purchases, donations, and different acquirement avenues.
One of many starkest findings of the research is that regardless of all of the hype, speedy progress, and authorities and company involvement world wide, Bitcoin adoption remains to be within the very early phases. River finds that Bitcoin is simply 3% of its full potential, evaluating it to the Web in 1990, social media in 2005, or on-line banking in 1996. The research cites the next metrics to assist this determine: solely 4% of the worldwide inhabitants owns Bitcoin, establishments are largely ignoring BTC in terms of allocating it of their portfolios, whereas the overall addressable market stays under 1% of an estimated quantity.
Greater than that, Bitcoin remains to be in its formative phases. The research highlights the steadily rising quantity of adjustments being made to the Bitcoin code and the rising variety of entities concerned within the growth of Bitcoin and funding the improve course of. The adjustments are aimed toward rising the protocol’s safety, community scaling and enhancing the pliability of Bitcoin storage and transactions.
Worth and shortage
A lot has been stated about Bitcoin’s shortage as a vital driver of its worth. The research highlights that in 2024 the provision of Bitcoin was rising slower than the provision of all main fiat currencies and gold.
Bitcoin is proving to be extra of a retailer of worth than a way of on a regular basis cost. The typical transaction worth in 2024 was value $17.8k, in accordance with River. Since 2021, the annual quantity of worth transferred by way of Bitcoin has been over $1 trillion. In 2024, this quantity reached $3.43 trillion, decrease than in 2021 and 2022 however larger than in 2023.
In response to the research, the Bitcoin market capitalization (a time period questioned by some in relation to Bitcoin) exceeded the $2 trillion mark in 2021, making Bitcoin the world’s eleventh largest forex within the USD equal. Talking of the present bull market, River stresses that, not like the earlier two bull markets, this one isn’t being pushed by the worldwide cash provide.
In 2024, the primary value drivers had been Bitcoin ETFs and companies, with hedge funds and funding advisors being essential. Nevertheless, Bitcoin remained “folks’s crypto” with nearly 70% owned by people, 4.4% by firms, 6.1% by funds and ETFs, and just one.4% by governments. The truth that public firms are more and more changing into Bitcoin holders is hardly stunning to anybody who has been listening to the crypto market these days. In 2024, the quantity of business-held BTC elevated by 80%.
Immediately, people management 70% of all bitcoins. That is probably the best it would ever be for the approaching century. Which means we now have right here a historic alternative to go away our mark on the world, and may assume lengthy and deep tips on how to make the most of this reward for good. pic.twitter.com/zSi3l7Auqm
— Tuur Demeester (@TuurDemeester) February 25, 2025
As of Dec. 31, 2024, over 1.5 million bitcoins (7.5% of the overall provide) are thought of misplaced, whereas one other 968k bitcoins (4.6% of the overall provide) are related to the Satoshi addresses. Almost 1% of the provision is held by bankrupt estates and sensible/DeFi contracts. The full quantity of locked bitcoins exceeds 2.7 million (about 13% of the overall provide).
Lightning Community
Lightning Community hasn’t been rising very quick these days. The research means that the reason being that too few retailers are prepared to just accept Bitcoin, as they’ve sufficient different conventional choices obtainable. Growing the variety of areas that settle for Bitcoin would have elevated using the Lightning Community. Another excuse for the gradual progress of Lightning Community is the comparatively low BTC charges. The upper they go, the upper the demand for Lightning Community might be.
Bitcoin custody
In 2024, Bitcoin custody matured, the research says. The share of bitcoins held on crypto exchanges has dropped considerably from over 70% in 2021–2023 to only 56.6% in 2024. ETFs and DeFi platforms maintain round a 3rd of all bitcoins, whereas Technique’s share is 10.3%.
The variety of bitcoins misplaced to hacks or for different causes has been continually reducing over the past 10 years, with the one fluctuation in 2022 when the collapse of FTX, Celsius, and BlockFi resulted in vital losses of BTC. After the FTX collapse Proof of Reserves grew to become the trade normal, drastically lowering the probabilities of shedding BTC on collapsing crypto exchanges.
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Decentralization
Not solely is the variety of energetic builders rising, however, extra importantly, the variety of nodes and the community hashrate quantity are continually rising. The research exhibits that the node quantity progress follows an ascending zig-zag trajectory, that means that in any given yr, the variety of nodes is mostly larger than within the earlier years. Within the second half of 2022, each the variety of nodes and hashrate quantity elevated, making Bitcoin tougher to tamper with.
The principle problem with Bitcoin’s decentralization identified within the research is the mining pool distribution. Over a 3rd of the overall hashrate is produced by a couple of public firms. The highest three mining swimming pools produce round 60% of the overall hashrate. As for geography, the international locations championing Bitcoin mining are the U.S. (36% of hashrate), Russia (16% of hashrate), and China (14% of hashrate). The share of the U.S. and China has decreased in 2024 whereas Russia is extra persistent, which isn’t stunning, on condition that the nation has just lately grow to be more and more pro-crypto.
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