Introduction
The last report published by the Cambridge Centre for Alternative Finance concluded that there were more crypto traders than ever, with more than 35 out of 139 million cryptocurrency accounts ID-verified users, which could be considered as regulated exchanges’ users (Coinbase, etc.), and therefore considered as active crypto traders. This figure doubled since 2017 and cryptocurrency gained 17 million verified users last year. That being said, crypto traders’ activity is difficult to track, notably because the criteria that were used varied significantly.
In another research paper Datalight investigated most popular crypto exchanges to find out which countries are actively trading and buying cryptoassets. Unsurprisingly, the main result of the study showed that most crypto traders are located in the USA, Japan and South Korea. Nonetheless, Datalight concluded with a total number of crypto traders twice as high as the Cambridge finding: 68.5 million crypto traders instead of 35 million.
In addition, by digging into various databases, contradictory figures were highlighted during our research.
For instance, Datalight reported that there were about 4 million crypto traders in the UK, which would imply a penetration rate of 6% — much higher than other very crypto-active countries, such as USA (4.65%) or South Korea (9.66%). In other words, it is the equivalent to the penetration rate of Japan that embraces a monthly Bitcoin average trading volume of 42,000 BTC, while this figure is divided by 10 for the UK (4,000). According to our cross-methodology, the UK penetration rate was rather between 1 and 2.6%, far from the 6% published so far.
That’s why our study intended to challenge the way crypto traders’ number has been estimated so far (1) and to find another way to point out the global crypto traders (2) — both established as well as new entrants — . Note that we focused on crypto investors only. We did not estimate the number of crypto users, meaning that we studied traders who are using Exchanges to trade at some point, even if they — from time to time — move their assets to wallets, soft or hard (but still visible on the various blockchains anyway). As an example, one out of every three South Koreans either owns cryptocurrencies or gets paid in it, while only one South Korean out of ten trades.
What are the results that came out of our study?
By capturing and analyzing data from main Exchange platforms, from 2 different angles, volume of transactions per fiat currency and audience (UV), our benchmark study pointed out that there were about 43 million active crypto traders. That is more than the 35 million worldwide cryptocurrency accounts ID-verified reported by the Cambridge research paper in December 2018. Among those 43 million crypto traders, as expected we determined that more than 35% were American (15.3 million, a number confirmed by the Crypto Market Journal mentioning an estimated 5% of Americans holding bitcoin), 10.3 million are based in Europe, followed by Japan and South Korea that have a similar traffic levels (6.7 and 5 million). Despite our results are similar to those already published regarding Japan and Korea, our findings vary in regards to other countries.
For instance, Datalight concluded that there were more than 22 million American crypto traders, 3.2 million Russian crypto traders, and 3.1 million Brazilian crypto traders, while our conclusions ended up with 15.2 million American crypto traders, 0.8 million Russian crypto traders and 0.9 million Brazilian crypto traders only.
Therefore, it is our understanding that the cryptocurrency market is less centralized than initially thought, even though the USA remains one step ahead.
Speaking of centralization, almost 1 out of 2 active crypto traders use the Exchange platform Coinbase (47%) to buy, sell, and manage their cryptocurrency portfolio.
Coinbase recently announced 30 million opened accounts and more than 20 million customers served. Our methodology confirmed that Coinbase had around 20 million active crypto traders (18.8).
Surprisingly, the penetration rate lead us to conclude that some other countries standout by getting more and more into cryptoassets, such as Poland (8.01% of penetration rate), New Zealand (4.49%), Malaysia (4.12%), and South Africa (2.79%). As a comparison, the USA penetration rate is 4.65% and Switzerland is 2.02%. The highest penetration rate goes to South Korea (9.7%).
A closer look at the Polish case reveals that when it comes to the blockchain technology development in Europe, Poland is very progressive.
Indeed, the Polish Financial Supervision Authority, Komisja Nadzoru Finansowego (KNF), has licensed two crypto startups as payment providers in early 2019. The companies, Coinquista and Bitclude, offer a number of services related to cryptocurrency, such as digital asset exchange platforms and crypto wallets. In addition, the Polish Blockchain Technology Accelerator (PATB), has recently revealed that one of its team is working on the development of a digitized national cryptocurrency, called Digital PLN (dPLN).
One of the many other conclusions to remember is also that the total European Bitcoin trading volume (44 countries) is equal to the trading volume of Japan (17% and 16%). The USA has more than 50% total trading volume worldwide and all the other countries left aside represent 12.6%.
Why do we believe our approach is more reliable compared to those that have been studying this topic in the past?
Our research paper was intended to find out how many active crypto traders are across the globe by doing a cross-analysis between two distinct methodologies.
Applying a double-check is more than necessary, especially when it comes to pointing out data that are crunched with numerous criteria, various databases and significantly different factors, such as estimated unique visitors, browsers market share, mobile Android/IoS App downloaded, GDP, penetration rate, etc.
The challenge we faced was mainly to end up with the same outcomes in both methodologies applied on this specific business case.
Fortunately, both methodologies highlighted on 2 similar active crypto traders figures: 42 and 43 million. Additionally, the methodology 1 and 2 revealed a similar number of European active crypto traders (11.7 and 10.1 million).
We estimate that our benchmarking study captures about 90% of the global economic activity in the cryptoasset industry segments traded in the 8 main Exchange platforms studied in this report. Plus, COQONUT’s Data point out that crypto traders have about 1.1 active account each on average.
So we estimate the total of active crypto traders being between 51.2 and 52.4 million.
Which cross-methodology did we use?
Carrying out a detailed study of the number of active crypto traders worldwide is not a simple task to perform. Our study aimed at analyzing both the number of unique website visitors/pageviews and the Bitcoin trading volume.
This way, the global number of crypto traders can be looked at via 2 distinct and reliable sources. The study of estimated active and unique BTC traders is based on Alexa’s sources, Google Play Store sources and Statista sources.
The research on Bitcoin trading volume is to determine the number of BTC traders that are based on Cryptocompare data. Not only did we pay attention to monthly visits (such as in the case of Datalight), but we also made sure to challenge those findings by cross-checking them with a second methodology based on BTC trading volume analysis.
Presentation of methodology 1
The first analysis we made is a combined measurement of estimated unique website visitors and total pageviews worldwide provided by Alexa’s web traffic API endpoint. We decided to use Alexa’s figures insofar as their findings are based on the browsing behavior of people in a global data panel, which is a sample of all internet users over a rolling 3-month period. Plus, traffic is updated daily. This served as the best way to obtain the most broad and accurate set of statistics across all the exchanges that we evaluate.
For the purpose of our web traffic analysis, Alexa’s historical Traffic Ranks, as well as Pageviews have been used over a one-month period. Alexa computes traffic ranks by analyzing the Web usage of millions of Alexa Toolbar users.
Pageviews are the total number of Alexa user URL requests for a site. Multiple requests for the same URL on the same day by the same user are counted as a single Pageview, which means that risks of error in users counting are mitigated. Additionally, Alexa employs data normalization to correct for biases that may occur in data crunching.
Alexa’s Traffic Ranks are for domains only (e.g., domain.com). It doesn’t provide separate rankings for subpages within a domain (e.g., http://www.domain.com/subpage.html) or subdomains (e.g., subdomain.domain.com).
Given the estimated unique and active users found in the USA per Exchange platform and according to the percentage of visitors per Exchange platform for each country provided by Alexa’s database, we were able to track both:
- the total amount of estimated unique and active visitors per Exchange
- the total amount of estimated unique and active visitors per country
For every resulting amount, we also analyzed the following factors to find out how many active crypto traders are there across the globe:
- Safari and Opera Browser global market share provided by Statista to find the total number of views worldwide (since Alexa’s doesn’t classify these 2 browsers);
- Mobile Android users, based on the number of downloading on Google Play Store of each of the 8 platforms studied (since Alexa only studies URL and not mobile app);
- Mobile IoS users, based on IoS global market share / Android; 75% vs. 25%, except for the US (50/50).
Presentation of methodology 2
The second methodology is based on the analysis of Bitcoin trading volume worldwide. We used BTC trading volume provided by Cryptocompare website over a 30-day period. We calculated the average monthly BTC trading volume per country. Then we picked up the total number of American users resulting from our first analysis.
From those two numbers, the total active crypto traders per country were deduced. In addition, for every amount, we mitigated the results by using the GDP per country (USD 2017).
Given our findings, we also were able to track down:
- The total trading volume per region;
- The percentage of trading volume per region / worldwide;
- The penetration rate of BTC users per country.
