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Bitcoin users to approach 5 million by 2019

A new report from Juniper Research has found that the number of active Bitcoin users worldwide will reach 4.7 million by the end of 2019, up from just over 1.3 million last year.

However, the report argues that usage will be continue to be dominated by exchange

A picture of a Bitcoin

Bitcoin Users To Approach 5 Million by 2019

trading, with retail adoption largely restricted to relatively niche demographics.

Retail Activity “Extremely Low”

According to the report, while a number of high profile retailers are enabling Bitcoin payment, activity levels from both online and offline deployments are extremely low. As report author Dr Windsor Holden observed, “While average daily transaction volumes have increased by around 50% since March 2014, the indications are that much of this growth results from higher transaction levels by established users rather from any substantial uplift in consumer adoption.”

The report cited a number of factors which it claimed would continue to inhibit growth, most notably the difficulty in communicating the concept of cryptocurrency payments to end users. It also argued that Bitcoin’s historical association with – and continued use by – criminals for illegal purchases and money laundering was likely to act as a further deterrent to mass adoption.

Supply Side Challenge

Meanwhile, the report observed that with many Bitcoins being hoarded by early speculators, currency supply could be further restricted with Bitcoin mining profitability threatened by a combination of the cryptocurrency’s volatility, lower Bitcoin yields and rising electricity costs.

Other findings from the report include:

  • The introduction of licensed, regulated exchanges could lead to a stabilisation in currency values and with it an increase in retail transaction adoption
  • The protocols behind cryptocurrency could be deployed in areas such as real-time transactional settlement
  • The altcoin market continues to be plagued by “pump and dump” currencies created solely as short-term investment vehicles

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