Are retail investors entering the market in large numbers? Data shows that the number of market participants is far less than in 2017

summary

From the perspective of some user agents, the number of retail investors is still similar to that in December 2017.
While DEX volumes have been hitting all-time highs, CEX volumes have been lackluster — especially for Bitcoin
Most indicators have declined over the past few weeks, having reached previous highs in early August.

Mass adoption is a hot topic in the cryptocurrency community, and many believe it is just around the corner. However, actual data still does not support this assumption. There are a few statistics on the number of people using or investing in cryptocurrencies, usually from surveys. Here are a few ways to estimate the number or prevalence of new users.

Based on data from multiple indicators, the trend is clear - the number of users in the market is still far from the number of people joining in 2017.

Trading Volume

Currently, Bitcoin trading volume on centralized exchanges has dropped by more than three times from its peak in 2017.

Source: CryptoCompare, The Block Research

In fact, the same is true for Ethereum, where the current transaction volume has also decreased by more than 3 times.

Source: CryptoCompare, The Block Research

Overall, Bitcoin’s total transaction volume is currently about twice that of Ethereum.

While DEX volume has indeed grown almost exponentially, it is still only a small fraction of CEX volume.

Source: Dune Analytics, The Block Research

Google Search Index

Google searches for “Bitcoin” peaked during the week of December 17, 2017. In 2020, the average search volume has dropped by nearly 7 times from the peak week in December 2017. Recent searches have not even surpassed the slightly higher index caused by the halving.

Source: Google Trends, The Block Research

Google searches for “Ethereum” also peaked in December 2017. About a month ago, during the week of August 2, search interest reached a 30-month high, which was only a third of the 2017 top. It has since fallen by about 50%, and is about 6 times lower than the peak.

However, some smaller search terms have reached new heights. Two examples that come to mind are Uniswap and CoinGecko.

Source: Google Trends, The Block Research

This is mainly because Uniswap did not exist at the time, so it naturally reached its all-time high due to the recent DeFi craze.

Source: Google Trends, The Block Research

CoinGecko is also near its 2017 highs due to its popularity relative to its closest competitor, CoinmarketCap, following its acquisition by Binance.

Source: Google Trends, The Block Research

In terms of relative interest, Bitcoin still dominates. People search for Bitcoin about five times more than Ethereum, and even less for other search terms.

Source: Google Trends, The Block Research

Uniswap Users

The number of unique addresses interacting with the Uniswap contract is an ideal measure of the number of real users interacting with Ethereum. While a single user can (and often does) have multiple addresses, it’s still worth keeping an eye on — especially for growth. In August, there were already ~162,000 addresses, a month-over-month increase of 113%.

Source: Dune Analytics, The Block Research

in conclusion

It is very clear that there are far fewer market participants now than in December 2017. There was a significant increase in early August, but this has not been sustained in recent weeks.

The only indicator that has seen sustained growth is interest in DeFi, but worryingly, it has not been reflected in the broader market in recent weeks. (Crypto Valley)