Bitcoin adoption by countries is only 3% of its full potential, says River exchange report

The River exchange platform has published a very interesting report on bitcoin. We are at the very beginning of an adoption rate similar to that of the internet.

The River exchange platform has published a very interesting report on bitcoin. We are at the very beginning of an adoption rate similar to that of the internet.

Bitcoin vs Internet

The world is adopting bitcoin faster than any other asset, despite the current turmoil in the crypto market. Here is a series of data gathered by River to understand that we are only at the very early stages.

For example, the number of publicly traded companies that have adopted bitcoin is less than 1%. The S&P 500 and NASDAQ only have 2 and 3 companies respectively that have made bitcoin their main cash asset.

It is estimated that 18 countries hold bitcoin. Most obtain it through mining. This includes Bhutan, El Salvador, Iran, Oman, and Ethiopia. Others have acquired it through seizures in criminal cases (China, USA, UK). Some, like the United Arab Emirates, purchase it directly.

“Given the increased geopolitical uncertainty and the global trend to abandon U.S. Treasury bonds as reserve assets, it is possible that at least one G20 country will announce holding bitcoins for strategic purposes within the next four years”, estimates River.

“If the dollar remains the uncontested global reserve currency […], countries like Russia have begun to use alternative currencies, including bitcoin, for international trade”.

Ultimately, much will depend on the United States where Senator Cynthia Lummis is working hard to convince Congress to buy between one and five million BTC… However, River estimates that the probability of such a scenario is “low”.

River does believe, however, that it is likely that Congress will vote in favor of an exemption from the capital gains tax for small payments of less than $200.

We will see if Donald Trump dares to buy between 5% and 20% of the bitcoins in order to erase part of the debt in the coming years.

The best is yet to come

According to River, bitcoin adoption is only “3% of its full potential”. Three main indicators lead to this figure:

* the network’s hashrate;

* the number of bitcoin users;

* the share of the network's hashrate managed by publicly traded companies.

The upside potential remains immense…

In the long term, River expects a single bitcoin to be worth several tens of millions of dollars and to replace the dollar as the international reserve currency. An opinion shared by yours truly.

Bitcoin vs Gold & Dollar

The report highlights that in 2024, thanks to the “halving”, bitcoin became harder to obtain than gold!

The halving refers to the part of the protocol that, every four years, halves the rate of BTC issuance. About 900 were created per day before April 2024, compared to 450 today.

Meanwhile, the number of dollars in circulation has increased by 3.7% (more like 7% on average). This increase was 2% for gold in 2024 and only 0.85% for bitcoin.

Thus, after 18 years of existence, more than 94% of the 21 million bitcoins have already been issued. There are precisely 19.82 million BTC in circulation at the time of writing.

These bitcoins are mostly held by individuals (70%). Next are ETFs like BlackRock’s with 6% of the BTC. Companies like Strategy (formerly MicroStrategy) hold 4.4% and it’s 1.4% for governments. It is estimated that nearly 10% of the BTC are lost forever.

These figures could change significantly in 2025 if the United States does indeed decide to purchase 20% of the BTC as Michael Saylor suggests. Wait and see…

How has the network evolved, technically?

Regarding the protocol, 115 developers have actively worked on the code over the past year. They made over 2,500 proposals to modify the code, totalling 276,000 lines of code that were adjusted.

Thirteen sponsors fund these developers, with three newcomers in 2024. Good news for the decentralization of the network. For instance, Blockstream, Brink, Spiral, etc.

The year 2024 was marked by many proposals aimed at modifying the protocol. However, the emergence of “inscriptions” (Ordinal, BTC-20, etc.) has frozen several initiatives due to the disagreements they caused within the community.

As long as the developers and the community at large haven’t reached a consensus, the probability, timeline, and implementation of proposed changes will remain uncertain.

Most proposals aim to increase the number of people who can take possession of their bitcoins. However, the figures show that this is absolutely not a priority, hence the status quo.

Not your keys, not your coins!

Decentralization of Bitcoin

Decentral