Bitcoin (BTC) Dominates New Users Portfolio as Ethereum Layer 2 Scaling Solutions Drive Crypto Adoption

A recent study has shown that Bitcoin (BTC) and Ethereum layer 2 scaling solutions played a crucial role in driving crypto adoption in several jurisdictions.

The digital asset market witnessed unprecedented growth over the last twelve months, attracting a large influx of new participants. As new investors entered the scene, centralized exchanges experienced a surge in trading volumes, and the stablecoin market also saw significant expansion.

BTC Dominates New Users' Portfolios

According to a survey by CryptoQuant, there was a growing interest in Bitcoin after the sector experienced a surge last year. The report, titled “2024 Crypto Survey: Exchange Use and Investor Behaviour,” highlighted multiple interests, areas, and trends within the industry.

As expected, BTC's popularity outpaced other assets due to the skyrocketing demand, especially for retail investors. Among the institutional investors, BTC was also the most sought-after asset, although XRP and ETH also attracted significant interest.

Apart from stablecoins, Bitcoin remained the first crypto that was sought after by a consensus of both retail and institutional investors. In the United States, the Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs last year, opening a new investment avenue for traditional players. These funds attracted billions in investment, contributing to the asset's price reaching a new all-time high.

Amid the market frenzy, new users were quick to adopt Bitcoin in droves to participate in the sector and anticipate price peaks, leading to a diversified portfolio. The survey also highlighted the demand for Ethereum layer 2 solutions, driven by the rise in decentralized finance (DeFi) protocols. Other cryptos that were in high demand included XRP, Solana, and Ether.

Geographically, Asia had the highest crypto users as its youths embraced the use cases. According to the survey, the continent led with 40% of participants, while Europe and North America polled 29% and 10%, respectively. The general adoption was seen mainly across all regions due to macroeconomic factors and a need to hedge against inflation.

Binance Leads Centralized Exchanges

Participants indicated interest in Binance as their preferred centralized exchange in certain jurisdictions. Of 17,566 respondents, 53% used Binance as a primary exchange, while 48% held most platform assets.

Furthermore, more than 50% of this number noted that more crypto gains were recorded from Binance. The exchange remains the largest by trading volume and is key to Bitcoin's institutional and retail value.

“Bybit, Binance, OKX, and Bitget attract a larger share of full-time traders (more than 30%). Meanwhile, Coinbase, Crypto.com, and Kraken cater primarily to part-time traders (more than 80%), reflecting their focus on casual investors. The difference could also be explained by the distinct preferences of traders in the exchange's core regions,” CryptoQuant noted in the report.