The number of ADA holders grow despite the bear market

Published 27.3.2023

Total Value Locked (TVL) makes a new ATH regularly. That's definitely a good thing for DeFi, but it's not the only important indicator we should be concerned about. More important is the activity on the network and the number of users. Cardano is growing in these stats as well. In this article, we will focus on the number of non-zero balance accounts.


The Shelley and Alonzo hard forks were significant milestones for Cardano. Account growth increased 12-fold in 2 years based on these events. The number of new accounts continues to grow in the current bear market. Cardano is slowly getting into a similar situation as Ethereum in 2017 when the number of accounts grew 4-fold. Cardano has a chance to reach the 10M account mark with non-zero balances in 2025. If that happens, Cardano will be almost unstoppable.

From hundreds of thousands of users to millions in 2 years

The path to a high network effect always starts with a small number of users. Blockchain protocols are much like social networks. Their use is completely voluntary and is mainly determined by user preferences and the network effect already obtained. All newer projects have the slight disadvantage of catching up with existing ones. The blockchain industry is still very young and major waves of adoption are still ahead. It is still realistic to catch up with existing rivals in user numbers. All current dominant blockchain projects started with literal units of users. Within a few years, they have reached millions of users. This is true for Bitcoin, Ethereum, and, as you will soon see, at the moment also for Cardano.

There was a Shelley hard fork in July 2020 which opened staking for ADA holders. Alonzo hard fork brought smart contracts to Cardano in September 2021. These were two key events in terms of adoption that kick-started the growth in accounts.

Staking was so attractive that within a year the number of users increased approximately 50 times from July 2020 to June 2021. The number of accounts with non-zero balances increased from 17,000 to 835,000.

In early 2022, the first DEX and other applications on Cardano began to launch. During 2022, the number of accounts grew by about 670,000. On average, about 1,800 new accounts were added daily. Last year can be considered the beginning of the bear market. During the 3 months of 2023, the number of accounts increased by about 68,000. That's in the order of hundreds of new accounts a day. On average, around 800 new accounts are added daily.

There are currently approximately 2,240,000 accounts with non-zero balances on Cardano. It is difficult to estimate further developments. The ongoing bear market is having a negative effect on the interest in the blockchain industry and therefore on the number of users. On the other hand, DeFi on Cardano is literally in its infancy. This could have a positive effect on the further growth of the network effect.

Is it possible to overcome the network effect of current projects?

Do you find the growth in the number of accounts on Cardano fast or slow? It's good to put the numbers in perspective with older projects. This will give us a relevant answer.

Bitcoin reached the 5M account mark between 2015 and 2016. It took more than 6 years to do so. Bitcoin was the first blockchain that forged the path of the blockchain industry. The growth of other projects will be easier. Note that the number of accounts is growing significantly faster in the bull market. In 2017, the number of Bitcoin accounts rose from roughly 10M to 25M. In the bear market, the number of accounts decreased by 5M and then grew slowly. By 2020, Bitcoin has reached 25M again. In the bull market in 2021, another 10M new accounts were added. Currently, Bitcoin has over 44M accounts with non-zero balances.

Do you think it is possible to overcome the network effect of Bitcoin? Yes, it is possible and Ethereum has succeeded in 2020.

Ethereum was launched in mid-2015. Ethereum reached the 5M account threshold between 2017 and 2018. It took approximately 3 years from launch. That's only half the time it took Bitcoin. Between 2018 and 2021, i.e. during the bear market to the peak of the bull market, the number of accounts grew by about 40M and reached the 50M mark.

In 2020, Ethereum surpassed Bitcoin in the number of accounts. In Q2 2023, the number of accounts on Ethereum is expected to reach the 100M mark. Ethereum outperforms Bitcoin twice in this statistic. Note that the number of accounts in the case of Ethereum has been growing steadily and there has not been a significant decline as there was for Bitcoin in 2018.

In the bear market, from the beginning of 2022 until now, the number of accounts in the Bitcoin network has grown by roughly 4M. In the case of Ethereum, it's about 30M over the same period. Ethereum is growing 7.5x faster than Bitcoin in terms of accounts. 8,800 new accounts are created daily on Bitcoin, while 66,000 are created on Ethereum. That's a difference of orders of magnitude.

When can Cardano reach 10M accounts?

As we have already described, significant increases in users occur during bull markets. It is common for Bitcoin and Ethereum that the number of accounts slowly grew during bull markets, only to explode during bull markets. Cardano is well on his way to repeating similar success, as he meets this prerequisite.

At the start of the bull year in 2017, there were roughly 1M accounts on Ethereum. By the end of the year, the number was close to 5M. That's roughly a 4-fold growth during the bull market. In the bullish year 2021, growth was already slower, roughly 1.5 to 2 times.

Cardano is now in a similar phase to Ethereum in 2017. The next bull market will be in 2025 (Bitcoin halving will be in 2024). That's roughly a year and three quarters, during which the number of Cardano users will still grow. If the current growth trend in the number of accounts holds, it is very likely that there will be roughly 3M accounts in early 2025. This is a very good starting position and is significantly better than where Ethereum was in 2017.

In the last bull market in 2021, the number of accounts grew almost 9x, and recall that that was a year when there was no DeFi on Cardano yet.

There are many factors influencing the growth of accounts and this article does not aim to list and analyze them all. Let's try to list at least some of them. The number of accounts may tend to grow faster if it is small (Ethereum in 2017, Cardano in 2021), say under 10M. Once the number of accounts is higher than the order of tens of millions, growth will be slower (Ethereum in 2021).

In our analysis, we use only on-chain data. We do not deal with second layers and accounts on centralized exchanges. We can assume the majority of accounts using the second layer of Ethereum probably also have an account on the first layer. Accounts on centralized exchanges can skew the statistics a lot.

It may be more difficult for Cardano to catch up to Ethereum (and other platforms), so 10-fold growth would be a big surprise. It is difficult to predict whether the growth in Bitcoin and Ethereum accounts will slow to say 1 or 2 times, or whether it will be 5 times (or higher). Rather, it appears that the rate of account growth is slowing over time. A doubling of account growth in the case of Ethereum would mean it would surpass the 200M mark. Bitcoin would probably surpass 80M and possibly attack the 100M mark.

The growth in the number of accounts for smart contract platforms is utility based. Ethereum is fully exploitable today while Cardano is just getting off the ground. Major applications on Ethereum are consolidating their position in the market while no clear winners have yet emerged on Cardano.

Can Cardano have 10M accounts by the end of 2025?

We believe Cardano may have 3M accounts by early 2025. To get to 10M accounts in 2025, Cardano needs to grow roughly 3.3 times. This is roughly similar to the growth Ethereum experienced in 2017. If the growth was only half that, roughly 2 times, Cardano would get to 6M accounts.

The number of accounts is 20 times smaller for Cardano than for Bitcoin and 50 times smaller than for Ethereum. We shall see how this ratio changes in the coming years.

We are optimistic that the 10M mark will be surpassed. Smaller platforms have more room to grow. DeFi services on Cardano are still in the early days. Hydra will be launched before the next bull market. In addition to the stablecoin DJED, the USD-backed stablecoin USDA and others will be launched. Cardano is one of the top 5 projects for NFT and new marketplaces are being created. Decentralized Identity (DID) will be available in the Lace wallet and probably elsewhere. People will be able to start using it.

It can be tricky to rely on cycles, and it is possible that everything will be different. Bitcoin halving may have a shrinking effect and the blockchain industry will be influenced by other fundamentals such as regulation, inflation, adoption by people from developing countries, blockchain usage by institutions, etc. The growth of users can be greatly affected both positively and negatively.

An unexpected event (a black swan) can intervene in the course of events, which can fundamentally change the position of individual projects for better or worse. It could be a major adoption, a new technology or integration with another existing technology (AI), a fatal protocol error, a fatal hack, or something else.


The success of all blockchain networks has one thing in common. The number of accounts has grown almost consistently regardless of market sentiment. For Bitcoin, we could see a dramatic drop in 2018, but this was overcome within 2 years and the reason for the drop was probably the bursting of the bubble.

Cardano has a great chance to cross the line of being unstoppable. Unfortunately, no one will tell you what number of accounts represents that threshold. The unquestionable indicator of success is the constant growth in the number of accounts, which can tend to be significant in a bull market. Once Cardano surpasses the 10M account threshold, it can grow in the millions of users per year. The year 2025 can tell us a lot about the future of the project. So far, everything is going very well and it can be said that the trajectory is very similar to Bitcoin and Ethereum.


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