Cryptocurrency market experiences a downtrend. On the other hand, the number of cryptocurrency users is growing.
In bearish situations like this, the crypto asset traders, users and investors are expected to fall since the product they are trying to invest in seems to be losing value in the market. But this is not how the crypto users and investors view it, in fact, they see it as an opportunity. In order to make significant profits, traders and investors tend to buy more of the coins when it's price is low and then sell when it's price goes high.
That's why the number of users interested in cryptocurrencies is continuing to grow globally. As per the data surveyed by Finbold, more crypto exchanges around the globe including Kraken, Binance, Coinbase, etc., are recording an influx of more digital currency users.
According to the data by CoinMarketCap, there has been an increase in weekly visits on several cryptocurrency exchanges. For example, amidst the ongoing bearish trading period in the cryptoasset market, Binance has been recording over 38.5 million weekly visits, Coinbase has been recording over 3.9 million, Kraken records more than 3.6 million, KuCoin gets over 1.9M, Gate.io gets about 1.89M, Bithumb gets about 1.6M, Binance.US gets over 1.5M, Huobi Global records over 1.47 million, Bitfinex records over 1.04 million and Bitstamp gets over 603,590 weekly visits. All these visits show that people are interested in associating with digital currencies.
According to the data by Finbold that was based on an anatomy of the exchange's confirmed user growth rate since 2018 (the past 3 years) and other important factors including the security measures offered by the exchange platform, trustworthy, abiding laws from regulators, etc, it has been discovered that Coinbase verified customers are estimated to reach over 72.8 million before the end of this year (2021). This means that its verified customers will have grown by over 30% down from the 56 million verified users that were registered as of first quarter (Q1) of 2021.
By 2014 (two years after opening it's business), Coinbase exchange had about 1.1 million verified users, the figure increased to 30 million by 2019 and by 2020 during the time when the number of people using cryptocurrency increased due to the outbreak of Covid-19 pandemic, the number increased to 35 million.
By January 2021, the number of verified cryptocurrency users globally had clocked about 106 million, according to the report dubbed "Measuring Global Crypto Users." The main catalyst for January's 16% growth in the worldwide cryptocurrency population was due to the strong growth in Bitcoin adoption - the period when Bitcoin price was standing at about $41k.
Also according to the report, other likely events that pushed digital currency adoption high was the significant growth of decentralized finance (DeFi) where several financial and payment services providers started launching cryptocurrency services, huge institutional adoption as well as facilitation of digital currencies.
Now, the user base is growing because of a multitude of factors including the skyrocketing focus on Bitcoin and cryptoasset exchange-traded funds (ETFs). Today, the US Securities and Exchange Commission (US SEC), an agency responsible for enforcing the law against market manipulation, is receiving several BTC and crypto ETF applications because applicants are anticipating the potential approval of the ETFs.
Furthermore, it is clear that whenever there is an increase in the number of crypto users, the prices of cryptocurrencies also increase. For instance, when the Coinbase users increased from 13M to 22M, 30M to 35M, 35M to 56M, the total cryptocurrency market cap increased from $15.6B to $751B, $121.2B to $281.9B, $281.9B to $2.5T, respectively.
This is because when the demand (users or customers) increases while the supply is limited, the price of the commodity (cryptocurrency) automatically increases. Therefore, we expect an increase in the prices of most used and adopted digital currencies including Bitcoin, Ethereum, Binance Coin and many others.