Definition:
Total addresses in the crypto market refers to the number of unique digital wallets or "addresses" that have been created on a particular blockchain network.
Addresses are used to send and receive cryptocurrency transactions and can be thought of as similar to bank account numbers. They serve as public identification for the owner's digital wallet.
For example: As of January 1st 2023, the number of digital wallets or addresses on the Bitcoin blockchain network was 1.07 billion. Surely not every address is from a unique owner, but this substantial figure demonstrates widespread usage and adoption of Bitcoin globally.
In the photo below, you can see the number of total addresses on the Bitcoin blockchain since it's inception. One can notice a steady rise in total addresses over time.
What to watch for:
Adoption: Studying the total number of addresses in crypto markets can provide insight into the level of adoption and usage of a particular cryptocurrency. An increase in the number of unique addresses on a blockchain network indicates a growing number of users engaging with that cryptocurrency. Additionally, analyzing the growth rate of addresses over time can provide insight into the rate at which new users are entering the space. This information can be used to make predictions about the future growth and adoption of a cryptocurrency.
Decentralization: Tracking the number of unique addresses can be a way to estimate the
number of unique holders of a certain coin, and thus, it can be considered as an indicator of decentralization. The more unique holders there are, the more decentralized the network is.
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