New research from River Intelligence reveals that Bitcoin is currently in the early stages of adoption, suggesting that the big things are yet to come. For instance, River outlines that the current Bitcoin adoption level is comparable to that of the Internet in 1990 or social media in 2005.
On Feb. 25, 2025, a Bitcoin-only institution River Financial Inc., released a study entitled “What’s Driving Bitcoin Adoption in 2025?” The report covers topics such as the current state of the Bitcoin protocol, the Lightning Network growth issues, the specifics of the latest bull market, the Bitcoin custody landscape, and more.
Table of Contents
Adoption is in the early stages
More and more governments are embracing Bitcoin, the report shows. While China, Afghanistan, and Venezuela’s crypto policies remain prohibitive, other countries are adopting crypto-friendly regulations, and by 2024, their number had increased, with Russia and Bolivia legalizing Bitcoin mining, Argentina and Turkey legalizing Bitcoin payments, and many other countries allowing investment in BTC or Bitcoin ETFs, etc. As of 2024, 18 countries owned bitcoins through government-backed mining, seizures, purchases, donations, and other acquirement avenues.
One of the starkest findings of the study is that despite all the hype, speedy growth, and government and corporate involvement around the world, Bitcoin adoption is still in the very early stages. River finds that Bitcoin is only 3% of its full potential, comparing it to the Internet in 1990, social media in 2005, or online banking in 1996. The study cites the following metrics to support this figure: only 4% of the global population owns Bitcoin, institutions are largely ignoring BTC when it comes to allocating it in their portfolios, while the total addressable market remains below 1% of an estimated amount.
More than that, Bitcoin is still in its formative stages. The study highlights the steadily growing volume of changes being made to the Bitcoin code and the growing number of entities involved in the development of Bitcoin and funding the upgrade process. The changes are aimed at increasing the protocol’s security, network scaling and improving the flexibility of Bitcoin storage and transactions.
Value and scarcity
Much has been said about Bitcoin’s scarcity as a crucial driver of its value. The study highlights that in 2024 the supply of Bitcoin was growing slower than the supply of all major fiat currencies and gold.
Bitcoin is proving to be more of a store of value than a means of everyday payment. The average transaction value in 2024 was worth $17.8k, according to River. Since 2021, the annual amount of value transferred via Bitcoin has been over $1 trillion. In 2024, this amount reached $3.43 trillion, lower than in 2021 and 2022 but higher than in 2023.
According to the study, the Bitcoin market capitalization (a term questioned by some in relation to Bitcoin) exceeded the $2 trillion mark in 2021, making Bitcoin the world’s 11th biggest currency in the USD equivalent. Speaking of the current bull market, River stresses that, unlike the previous two bull markets, this one is not being driven by the global money supply.
In 2024, the main price drivers were Bitcoin ETFs and businesses, with hedge funds and investment advisors being crucial. However, Bitcoin remained “people’s crypto” with almost 70% owned by individuals, 4.4% by companies, 6.1% by funds and ETFs, and only 1.4% by governments. The fact that public companies are increasingly becoming Bitcoin holders is hardly surprising to anyone who has been paying attention to the crypto market lately. In 2024, the amount of business-held BTC increased by 80%.
Today, individuals control 70% of all bitcoins. This is likely the highest it will ever be for the coming century. That means we have here a historic opportunity to leave our mark on the world, and should think long and deep how to utilize this gift for good. pic.twitter.com/zSi3l7Auqm
— Tuur Demeester (@TuurDemeester) February 25, 2025
As of Dec. 31, 2024, over 1.5 million bitcoins (7.5% of the total supply) are considered lost, while another 968k bitcoins (4.6% of the total supply) are associated with the Satoshi addresses. Nearly 1% of the supply is held by bankrupt estates and smart/DeFi contracts. The total amount of locked bitcoins exceeds 2.7 million (about 13% of the total supply).
Lightning Network
Lightning Network hasn’t been growing very fast lately. The study suggests that the reason is that too few merchants are willing to accept Bitcoin, as they have enough other traditional options available. Increasing the number of locations that accept Bitcoin would have increased the use of the Lightning Network. Another reason for the slow growth of Lightning Network is the relatively low BTC fees. The higher they go, the higher the demand for Lightning Network will be.
Bitcoin custody
In 2024, Bitcoin custody matured, the study says. The share of bitcoins held on crypto exchanges has dropped significantly from over 70% in 2021–2023 to just 56.6% in 2024. ETFs and DeFi platforms hold around a third of all bitcoins, while Strategy’s share is 10.3%.
The number of bitcoins lost to hacks or for other reasons has been constantly decreasing over the last 10 years, with the only fluctuation in 2022 when the collapse of FTX, Celsius, and BlockFi resulted in significant losses of BTC. After the FTX collapse Proof of Reserves became the industry standard, drastically reducing the chances of losing BTC on collapsing crypto exchanges.
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Decentralization
Not only is the number of active developers increasing, but, more importantly, the number of nodes and the network hashrate volume are constantly growing. The study shows that the node volume growth follows an ascending zig-zag trajectory, meaning that in any given year, the number of nodes is generally higher than in the previous years. In the second half of 2022, both the number of nodes and hashrate volume increased, making Bitcoin harder to tamper with.
The main issue with Bitcoin’s decentralization pointed out in the study is the mining pool distribution. Over a third of the total hashrate is produced by a few public companies. The top three mining pools produce around 60% of the total hashrate. As for geography, the countries championing Bitcoin mining are the U.S. (36% of hashrate), Russia (16% of hashrate), and China (14% of hashrate). The share of the U.S. and China has decreased in 2024 while Russia is more persistent, which is not surprising, given that the country has recently become increasingly pro-crypto.
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