LONDON – As cryptocurrencies evolve with proponents pushing for the sector’s mainstream adoption, wallets have emerged as the basic point of facilitating entry into the digital currency space. Therefore, the adoption of crypto wallets has remained relatively active despite the prevailing phases of market volatility.
In this line, data acquired by Finbold indicates that between January and October 2022, an estimated 102.06 million crypto wallets were downloaded for Android and iOS devices for 21 selected apps that enable digital currency storage. The value represents a drop of 42.37% from 177.85 million downloads in 2021.
Notably, last year’s figure represents the highest yearly crypto wallet downloads ever, representing a growth of 453.12% from 2020’s figure of 32.95 million. At the same time, 2017 recorded the second-highest rate of downloads at 433.33%, when the number of downloaded crypto wallets stood at 16.72 million.
Elsewhere, in 2022, January recorded the highest number of downloads at 16.11 million, while data for the most recent month October stood at 8.7 million. July recorded the least number of downloads at 7.29 million. Notably, the number of wallet downloads does not necessarily indicate the entry of new users. Sometimes, an individual investor can have several wallets under the same device.
Crypto wallets downloads follow market price trend
The data shows that the growth of crypto wallets mimics the general market trends. In particular, the downloads peaked in 2021 when the market enjoyed an extended bull run that saw most assets hit all-time highs, led by Bitcoin’s (BTC) $69,000 valuation. It appeared, the fear of missing out (FOMO) kicked in, with investors getting involved in a bid to capitalize on the rally.
Overall, investors leveraged wallets to facilitate related crypto activities such as investing, trading, peer-to-peer transactions, remittances, and yield farming.
On the flip side, the downloads have plunged amid the prevailing bear market as investor interest in digital assets remains low. Indeed, the low interest has been motivated by related activities such as the fear of losing crypto holding considering high profile incidents like the Terra (LUNA) ecosystem crash and the FTX crypto exchange collapse as confidence in centralized trading platforms took a hit.
Furthermore, the collapse of the FTX exchange has resulted in widespread liquidity concerns that might trigger an increase in downloads. In reaction to the crisis, most investors have opted to transfer their holdings from crypto exchanges’ hot wallets to self-custody wallets to retain control over their digital asset holdings.
Wallets meeting user demands
Despite the complexity of the cryptocurrency sector, wallets are also finding increased use cases as various platforms become user-friendly alongside supporting various currencies. Additionally, the seamless integration with fiat currencies and elements like bank accounts is helping wallets move into the mainstream.
At the same time, developers of crypto wallets are also making improvements to facilitate mass adoption. In particular, creators focus more on robust security features to achieve efficiency.
In general, wallets are a necessity for cryptocurrency users, and the downloads highlight how fast the popularity of decentralized digital money is growing. The trend of crypto wallet downloads has been rising over the past years, reflecting the sector’s growth.
Despite the slowed downloads in 2022, the crypto wallets’ space is attracting some established traditional finance players. For instance, American banking giant JPMorgan (NYSE: JPM) and payments platform Visa (NYSE: V) have highlighted the intention to offer crypto wallet services through respective trademark applications.
The future of crypto wallets
Furthermore, the growth of crypto wallets still faces a significant hurdle, with regulatory uncertainty ranking among the top reasons. Notably, different jurisdictions are moving towards enacting regulation for the crypto space, and wallets are emerging as a target. In this line, most regulators focus on security and the possibility of criminals misusing wallets to facilitate illegal activities. Similarly, wallets still face the threat of cyberattacks resulting in limited use.
While it’s challenging to determine the future trends of crypto wallet adoptions, the growth will mostly be dictated by the market price movement trends and the regulatory aspect.
Courtesy of Finbold.