Must-Know Takeaways From a16z’s Crypto Report
Ben Simpson
Navigating the world of crypto with confidence & expertise | Founder & CEO of Collective Shift | Helped 1000+ investors maximise their returns & create a winning portfolio strategy
Delivered each Friday, The Weekly Shift gives you actionable insights into the crypto market without the BS.
Hey LinkedIn,
Top-tier investment firm a16z released its annual State of Crypto Report last week. We dive into the key takeaways. ??
#1. Crypto Usage Hit All-Time Highs?
There have never been more active blockchain addresses.?
In September, 220M addresses interacted with a blockchain at least once, tripling since the end of 2023.
There are many comparisons to early internet adoption, an analogy promoted by a BlackRock executive at a digital assets event last month.
We take this one with a grain of salt because addresses do not equal users, but it’s encouraging to see mobile wallet use hit record highs in countries such as Nigeria, India and Argentina.
#2. Stablecoins Have Found Product-Market Fit
Who said crypto has no use cases??
Crypto is enabling easier access to dollars. The report by a16z found a strong correlation between countries struggling with currency depreciation and stablecoin adoption (e.g. Argentina).
There's no denying that stablecoin adoption is on the rise. And that momentum should continue thanks to the likes of Revolut, which is reportedly planning its own stablecoin launch, and Stripe, which this week acquired a stablecoin company called Bridge for $1.1B.
#3. The Infrastructure Is Finally Here
Thanks to the rise of Ethereum L2s and other high-throughput blockchains, blockchains are processing over 50x as many transactions per second as they were just four years ago.
The cost savings are remarkable, with the cost to send USD on blockchains falling by 99%, making them cheaper than traditional cross-border payment rails.
Underappreciated Findings
One of the biggest challenges remains only 5–10% of crypto owners are active users. So, although more than 617M people own crypto, very few are active onchain users.?
Growing this figure comes down to the next wave of crypto apps.?
The report also showed how dominant Solana is, recording almost twice the monthly active addresses (MAAs) than all Ethereum ecosystem chains combined (100M vs. 52M).
a16z believes the current regulatory environment has enabled rampant speculation around memecoins.?
The current regulatory environment in the U.S. essentially forbids any value accruing to most cryptocurrencies. A lack of regulation has meant 'VC coins' have been dumped on retail, increasing the appeal of “community” memecoins.
Will we see fundamentals shine after the U.S election if builders can create and give value to tokens?
Confirmation of Industry Growth
It's refreshing to see just how far the industry has come, and there are more legitimate use cases than ever before. ?
With infrastructure finally starting to scale, all eyes will now be on growing active users as we see more resources be allocated to consumer apps and unique use cases such as DePIN or AI that are only possible on blockchains.
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What happened? Payments company Stripe acquired stablecoin platform Bridge for $1.1B, its largest acquisition to date.
Why does it matter to you? It’s further evidence that Stripe wants to bolster its crypto capabilities. Expect other fintech companies to follow suit.
What happened??Bitcoin futures hit a record-high open interest on CME of $12.26B.
Why does it matter to you? Activity on the exchange is considered a proxy for institutional interest in crypto, hinting they could be taking positions, anticipating a continuation of the bull run.
What happened? AI chatbot Truth Terminal became the first AI crypto millionaire. Following a $50,000 gift from Marc Andreessen of a16z, the AI bot promoted a memecoin called Goatseus Maximus (GOAT) on Solana, sparking a strong market rally and community following as GOAT's market cap surged above $700M.
Why does it matter to you? Memecoins remain one of the hottest narratives this cycle and are showing no signs of slowing. They can be indicative of the market's appetite for risk and speculation.
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