Bitcoin’s dominance as the largest cryptocurrency in terms of number of holders is likely to be threatened due to new altcoins. Bitcoin owners’ market share of global crypto owners has dropped from 67 percent in January 2021 to 51 percent in June 2021, thanks to various new altcoins that rose from 20 percent to 38 percent over the period, a report by Hong Kong-based companies Payment and cryptocurrency platform Crypto.com. Bitcoin’s user base was 65 percent in February and March and 63 percent in April, before dropping to 53 percent in May of this year. The altcoins have also eaten up Ethereum’s market share, which fell from 13 percent in January to 10 percent in June.
“When we checked the composition of the crypto owners, we found that Bitcoin and Ethereum were losing their market share. New challengers such as proof-of-stake protocols and meme tokens showed great potential in May, especially after Bitcoin mining came under closer scrutiny, ”says the report entitled Measurement Global Crypto Users: A Study to Measure Market Size Using On-Chain Metrics. The introduction of altcoins in May in particular had resulted in a massive surge in crypto users from 143 million at the end of April to 221 million in June, likely due to the influx of new users using coins like Shiba tokens and Dogecoin etc.
However, the number of global crypto users had doubled from 100 million to 200 million in just four months, while the user base had grown from 65 million in May last year to over 66 million at the end of the month to 100 million in May In 2021, crypto users had exceeded 200 million and reached 221 million in June 2021. According to the report, January, February and April were exceptionally strong months with growth rates of 15.7 percent, 18.1 percent and 10.1 percent cents, respectively, fueled by Bitcoin’s outstanding performance. However, May was also exceptional at 43.1 percent, given the drop in Bitcoin and Ethereum prices, while Altcoins fared better after Elon Musk’s criticism of Bitcoin mining and its environmental impact. In June the growth was 8.9 percent.
The second half of 2020 broke into one due to several events like the sudden surge of DeFi in August, the introduction of crypto purchases by PayPal to US users in November, and the institutional rollout of companies like Greyscale and MicroStrategy in December added accelerated adoption of cryptos. The rollout of crypto continued in 2021, with large companies like Tesla, Mastercard, and others moving to digital currencies. Another significant development was that El Salvador became the first country in the world to introduce Bitcoin as legal tender.
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