Bitcoin Adoption in Early Stages, Study Reveals

A recent study by River Financial Inc. titled “What’s Driving Bitcoin Adoption in 2025?” has shed light on the current state of Bitcoin adoption, highlighting its early stages of growth. The study draws comparisons between Bitcoin’s current adoption level and that of the Internet in 1990 or social media in 2005, suggesting that there is still significant room for growth.

Early Stages of Adoption

Despite increasing government and corporate involvement, Bitcoin adoption remains in its early stages. According to the study, Bitcoin is only 3% of its full potential, with only 4% of the global population owning Bitcoin. Institutions are also largely ignoring Bitcoin, and the total addressable market remains below 1% of the estimated amount.

The study cites the growing volume of changes being made to the Bitcoin code and the increasing number of entities involved in its development as evidence of Bitcoin’s formative stages. These changes aim to improve the protocol’s security, network scaling, and flexibility of Bitcoin storage and transactions.

Value and Scarcity

Bitcoin’s scarcity is a key driver of its value. The study highlights that in 2024, the supply of Bitcoin grew slower than the supply of major fiat currencies and gold. Bitcoin is proving to be more of a store of value than a means of everyday payment, with the average transaction value in 2024 worth $17.8k.

The annual amount of value transferred via Bitcoin has exceeded $1 trillion since 2021, reaching $3.43 trillion in 2024. The Bitcoin market capitalization exceeded $2 trillion in 2021, making it the world’s 11th biggest currency in USD equivalent.

Current Bull Market

According to the study, the current bull market is driven by Bitcoin ETFs and businesses, with hedge funds and investment advisors playing a crucial role. However, Bitcoin remains “people’s crypto,” with almost 70% owned by individuals, 4.4% by companies, 6.1% by funds and ETFs, and only 1.4% by governments.

Tips for Investors

  • Consider the long-term potential of Bitcoin, with only 3% of its full potential currently realized.
  • Keep an eye on the growing number of entities involved in Bitcoin development and the increasing volume of changes to the Bitcoin code.
  • Understand the value of Bitcoin’s scarcity, with its supply growing slower than major fiat currencies and gold.

Lightning Network and Bitcoin Custody

The study suggests that the Lightning Network’s slow growth is due to the limited number of merchants willing to accept Bitcoin and relatively low BTC fees. Increasing the number of locations that accept Bitcoin could boost the use of the Lightning Network.

In 2024, Bitcoin custody matured, with the share of bitcoins held on crypto exchanges dropping significantly. ETFs and DeFi platforms now hold around a third of all bitcoins, while Strategy’s share is 10.3%.

Decentralization

The study highlights the growing number of active developers, nodes, and network hashrate volume. However, the main issue with Bitcoin’s decentralization is the mining pool distribution, with over a third of the total hashrate produced by a few public companies.

Individuals control 70% of all bitcoins, which is likely the highest it will ever be for the coming century. This presents a historic opportunity to make a positive impact.

Stay up-to-date with the latest news and insights on Bitcoin and the crypto market by following Global Crypto News.

Post Views: 1