what’s driving Bitcoin adoption in 2025 a new
report is out and is tackling this question with 50 pages of facts figures and a healthy dose
of hopeium Today we’ve handpicked the highlights and sorted the sensible from the sensation We’ve
got the answers to questions that matter the most like uh how early am I how bullish is too
bullish and is minor centralization going to be the death of us all my name is Nick Stay
tuned Today’s bullish Bitcoin report is exactly the kind of a bedtime reading that we here at
the Coin Bureau enjoy However as a collection of research it’s worth noting that the report
was authored and published by River Financial a Bitcoin financial services company Naturally
it’s not in their interest to publish anything less than the most bullish possible literature
about Bitcoin But on the other hand you can be biased and correct at the same time So has River
hit the bullseye with this report or is it just another case of bulls getting carried away let’s
investigate I’ll begin with the juiciest and most eyebrow raising part of the report which River
saved right for the end According to the report’s authors a Bitcoin’s adoption in 2025 is at just 3%
of the full potential 3% Bros I’m pretty sure that means we’re 97% early The graph on the right
here shows us that 3% of potential adoption places us on par with where the internet was in
1990 where social media was in 2005 and where online banking was in 1996 Excellent This is the
kind of big picture that we need when the market is giving us a hard time But hang on a minute
where did River get this number from the authors explained that they arrived at 3% of the potential
adoption based on a combination of three metrics global ownership institutional underallocation
and the total addressable market It’s not clear how these metrics are weighted but uh let’s check
each of them out River estimates Bitcoin ownership by individuals to be less than 4% worldwide And
this is based on a combination of global crypto ownership and Bitcoin ownership data from AAA
Crypto.com and the Nakamoto project Ownership is by far the highest in the United States
where River estimates it to be 14% Outside of North America Bitcoin adoption ranges between
1.6 to 6.6% from continent to continent The question is how many remaining 90 plus% of people
worldwide are likely to become Bitcoin owners And the answer depends on many factors including the
use case that will define Bitcoin for the rest of this century If Bitcoin is to become a direct
competitor to fiat currencies whose adoption rate in most stable countries is basically 100% then
the answer could be all of them However to date Bitcoin has seen a limited use as a medium
of exchange akin to fiat currencies Instead Bitcoin’s primary use case is an investment
asset Now some say it’s a store of value and a hedge against inflation akin to gold But since
Bitcoin is by far the best performing asset of all time we think most buyers go in with a higher
expectation than your average gold enjoyer At any rate if Bitcoin is an investment asset we might
better ask what percentage of the population owns investment assets And we’ll take the US as an
example According to Pew Research around 31% of US households own financial assets This figure might
be a more realistic benchmark for mass adoption of Bitcoin by the US public And while we’re on the
topic it’s worth considering the uneven impact that mass adoption will have on Bitcoin’s price
growth The US stock market might give us a bit of a clue here More than half of its estimated
total value is owned by 1% of US households Meanwhile 50% of US households collectively own
less than 1% of the stock market Now what could this tell us about the future of Bitcoin adoption
well the estimates about global ownership suggest we have a very long way to go until mass adoption
is accomplished But at the same time if the masses are poor we might accomplish mass adoption and
still not be able to afford our condo on the moon Food for thought Anyway this brings me to the
metric included in the River Financials adoption calculation Institutional underinvestment in
Bitcoin in the US Now this is where the real money is and I must say the numbers here are incredible
Underinvestment is definitely the right word The report shows a breakdown of how $128 trillion of
US investment advisor money is allocated based on data from the SEC On a net basis this money is
53% in stocks 17.6% 6% in alternatives including gold and other commodities 12.5% in corporate
bonds 10% in US government bonds 4.7% in cash and cash equivalents 2.3% in foreign government
bonds and last but not least 0.00.6% in BTC Well it looks like we have a lot of catching up to do
Now if this isn’t early I don’t know what is The report highlights that Bitcoin currently accounts
for around 0.2% of global wealth and that if US investment advisers increased their net exposure
to it even by this modest level it would equate to almost $250 billion of inflows into Bitcoin Now
dare we imagine a day when this allocation reaches 1 or 2% is that too much to ask it seems like
a modest allocation to me but for the price of Bitcoin the change would be anything but modest
Just a few more institutional toes dipping in the water could turn into some serious gains for
Bitcoin There is a caveat though River Financial is working with data from 2023 over here As we
all know last year was a major turning point for institutional interest in Bitcoin Bookended by
the world’s biggest asset managers launching spot Bitcoin ETFs last January and the US government
being reborn as a crypto advocacy group this January So we would really like to see how US
Investment Advisor net exposure to Bitcoin looks like more recently Something tells us it’s rather
a bit more than 0.006% Anyway I’m not sure how far through the author’s adoption equation we are yet
but there is one more metric that they included in their calculation This is the total addressable
market or TAM for Bitcoin In business jargon TAM refers to the total potential revenue a company
could generate if it served every single potential customer in the market This is necessarily a pie
in the sky number that helps businesses assess the overall size and potential of a market and no
doubt comes in handy when pitching to VCs about the size of the opportunity on the table You can
imagine how TAM could be extrapolated to Bitcoin It’s basically a theoretical ceiling on the market
cap of Bitcoin Now the numbers cited here are just mindboggling and there is no explanation
offered So you know we had to check those numbers It’s the place to be when you’re in
need of amazing crypto deals and opportunities 2023 article written by one Jesse Meyers a chief
investment officer at fellow Bitcoin financial services firm onramp Myers’s argument is that
since Bitcoin is a store of wealth asset and all of the world’s wealth is stored in one asset
or another Bitcoin’s total addressable market is all of the world’s wealth He offers an admittedly
rough estimate of all the world’s wealth at around $900 trillion using data from 2021 According
to Myers’ breakdown by asset class that year $330 trillion was in real estate $300 trillion
was in bonds $120 trillion was in fiat currency $115 trillion was in equities $18 trillion
was in art and $16 trillion was in gold Meyers then does acknowledge that 100% of the
world’s wealth being stored in Bitcoin is not realistic and ponders how much wealth one can
realistically hope to be redistributed from these other asset classes into Bitcoin And this is
usually described as the total obtainable market but the article still uses total addressable
market for this figure too Anyway obtainable or addressable this number is anyone’s guess and
Meyers doesn’t waste time trying to be too precise about it He answers the question with a table of
quote reasonable even conservative estimates that find Bitcoin’s total addressable market to be $200
trillion corresponding to a price of around $10 million per Bitcoin According to Meers 30% of the
value currently stored in fiat money 30% of the value currently stored in bonds 50% of the value
in gold 15% in equities 15% in real estate 5% in fine art and 5% in cars and other collectibles
will be reallocated into Bitcoin Seems a bit like a big ask to me although I won’t be complaining
if it happens I will obviously be sipping a pinina colada from the sund deck of my attack ship off
the shoulder of Orion Anyway Myers’s numbers are the final puzzle piece in River Financials Bitcoin
adoption data We can’t tell how this means that Bitcoin adoption is at 3% of its full potential
But perhaps this estimate is just an illustration that is supposed to whisper “Think big.” And we
can’t argue with that 2025 has gotten off to a bit of a rocky start Uh but if you’re in Bitcoin
for the long haul the outlook is very good You can turn on the news any given day of the week now and
you’re likely to hear some bullish crypto noises coming from the White House Something that was
completely unthinkable even just a year ago It’s an amazing time to be alive Yes we may be overdue
a recession but recessions they don’t last forever Bitcoin on the other hand might And at least for
the foreseeable long-term future all indicators are pointing up And one such indicator covered in
River Financials report is developer activity on Bitcoin Core Now if you’re not familiar Bitcoin
Core is the open-source software that runs the Bitcoin blockchain used by 98% of the nodes
on the network It’s a full node meaning that if you run Bitcoin Core on your computer you are
participating in the network connecting to other nodes sharing transactions and keeping your copy
of the blockchain up to date After Satoshi stepped back from publicly working on Bitcoin in 2010 a
global network of volunteer developers picked up where he left off and have been maintaining
and refining Bitcoin Core as the primary implementation of Satoshi’s original protocol The
Bitcoin Core developer community is tight-knit but highly active According to River Financial just
two new contributors joined in 2024 for a total of 115 Between them these volunteers changed 276,000
lines of code across 2500 commits Since its launch in 2009 the Bitcoin core codebase has grown
tremendously It now consists of more than 750,000 lines of code and is on course to break 1 million
lines if the current trend continues Now this may make you wonder what on earth all of these devs
are doing and why so much code is needed After all the Bitcoin protocol is a set of rules that have
been set in stone since 2009 and cannot be changed without a hard fork And indeed nobody is fiddling
with those rules A Bitcoin core is complete for its primary purpose of a decentralized value
transfer But the software is constantly being refined to improve its scalability security and
programmability In addition a lot of this work is just translating Bitcoin Core into a number
of different languages If we turn to River’s breakdown of Bitcoin Core code by category over
time we can see that localization accounts for the lion’s share of the code expansion since 2009
Documentation tests and dependencies also account for hundreds of thousands of lines of code A
Bitcoin cause base code has been also steadily expanding since the early 2010s which sounds a
little more exciting Admittedly the majority of developer activity consists of incremental tweaks
whose details are so technical and dry that they would put most of you to sleep For example if
you look too closely at the changes made in 2024 you’ll be bombarded with jargon like ephemeral
anchors lamport signatures and orphan rates However every code tweak is in service of a bigger
picture A faster more efficient blockchain with less congestion and fee volatility fewer bugs and
stuck transactions a chain that can support smart contracts and resist quantum attacks and one that
is no less decentralized and secure than it is in its current state Now you’re speaking my language
Moving on the reports authors turn to the growth of the Bitcoin network as measured by note count
and total hash rate Both show impressive growth with the number of reachable nodes roughly
doubling since 2021 And according to River their number grew a further 11% in 2024 given
Bitcoin almost 22,000 reachable nodes Now you may be wondering what’s the difference between
a reachable node and an unreachable node and how many unreachable nodes there might be well
reachable nodes also known as listening nodes are nodes that are publicly accessible over the
internet They accept incoming connections from other nodes and actively participate in relaying
transactions blocks and network data Unreachable or non-listing nodes also contribute to the
network by validating transactions and blocks but they don’t accept incoming connections from
other nodes nor relay data to the network They are hidden from direct external access and therefore
not easily counted Unreachable nodes play an important role in the network because Bitcoin’s
security model depends on both node types working in tandem As such the only reason to exclude them
from estimates of network size would be due to the difficulty in counting them Nobody knows the
exact number of unreachable nodes on the network and river doesn’t hazard a guess over here However
there is significant interest in estimating their number which is understood to significantly
outnumber reachable nodes A 2023 study led by researchers at Beijing’s School of Cyerspace
Science and Technology Beijing Institute of Technology estimated the total number of reachable
and unreachable nodes to be between 45,000 and 50,000 And at the time of making this video this
number is thought to have grown to around 62,000 And that’s according to Bit Nodes an ongoing
project to estimate the relative size of the Bitcoin network So depending on which nodes you do
or don’t include Bitcoin may be around three times larger than what you can see on River’s graph the
more you know Now if you thought node growth was looking good just wait until you see hash rate
which if you’re new here is a measure of the computational power that is used to secure the
Bitcoin blockchain Quote Bitcoin is now secured by almost 800 exahash of computational power
Meaning every second there are 800 quintilion computations being done to secure the network Yes
800 quintilion with 20 zeros Minor hash rate has grown at an average of around 107% per year since
2016 with an increase of 55% in 2024 You can see hash rate going parabolic on this a beautiful
graph where a banana formation is now well underway However the distribution of Bitcoin’s
hash power is less impressive Specifically its concentration in a small number of mining pool
distributions is a weak point for Bitcoin’s claim to decentralization The report pulled numbers from
hash rateindex.com showing that in December 2024 more than 60% of the network’s hash rate was
concentrated in just three mining pools Around 80% is in the top five pools and 90% is in the
top 10 And this is an improvement over a year prior but it’s still not a great look for the
world’s largest decentralized computer network Then again whether this is a gotcha moment for
Bitcoin’s decentralization is debatable Fears around mining pool concentration include dominant
pools influencing protocol upgrades prioritizing certain transactions to maximize profit or being
submitting to the demands of regulators Worse still if the top three pools somehow colluded
their majority control of Bitcoin’s hash rate would make it possible to launch a 51% attack
They could even halt transactions between some or all users or even reverse transactions executed
while they were in control allowing the transacted coins to be double spent Of course any such
scenario would be devastating But is Bitcoin mining pool concentration a slippery slope that
will take Bitcoin there perhaps not because mining pools are hash rate aggregators used by individual
unaffiliated miners who can freely switch pools if the one they’re using is up to no good Bitcoin’s
design and economic incentives make malicious activity by any minor or miners implausible
because it would be against their own economic interests There is no scenario in which malicious
behavior would be more profitable than honest mining in the long term More likely than malicious
behavior per se is submission to pressure from regulators We already have a case study of
this happening in the world’s biggest mining pool Foundry USA which currently accounts for more
than a third of global hash rate In 2023 Bitcoin mining pool F2 pool was caught mining sanctions
compliant blocks that excluded transactions involving certain blacklisted addresses This
was a concerning precedent but hardly a systemic censorship risk Now most mining pools ignored the
US Treasury’s demands and the transactions that were excluded were included in blocks mined by
other people As a result the transactions merely took one or two blocks longer to confirm than
usual Not only that but F2 pool lost a lot of hash rate as independent miners started pointing their
hash rate to other pools which were not censoring certain Bitcoin transactions And this proves that
Bitcoin’s permissionless design ensures that there is no permanent censorship unless all miners
collude and the chances of that happening are very negligible Collusion between the top pools
is also made unlikely by the fact that global hash rate is split pretty evenly between pools in the
US and in China which control a little over 41% each at the time of making this video So mining
pool concentration not the best optics for Bitcoin decentralization but not as bad as it looks Now
River Financials report lists many more vectors of Bitcoin’s growth and maturation than we can
cover in one video So I’ll drop a link down below for you to d yo But while there is plenty of room
for nitpicking numerical estimates Bitcoin really is only going from strength to strength So if
you’re bull a word for non-financial advice set your time frame to the yearly kick back and
relax with the latest update on the US crypto strategic reserve over here And if you’re not
subscribed to the channel yet you can do it right over here That’s me for today Thank you very
much for watching and I’ll see you again soon
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