The global spread of the COVID-19 pandemic has already affected the prices of cryptocurrencies. But another question worth considering is: what impact does this epidemic have on user activity? Since users are now staying at home, are they more inclined towards or shying away from blockchain technology?
In order to obtain this answer, we conducted a detailed analysis based on the number of active addresses on Coin Metrics, focusing on the top ten projects listed on CoinMarketCap (as of March 24). Since Coin Metrics does not provide data on active addresses for EOS, we only retained the following 9 tokens: BTC, ETH, XRP (Ripple), ERC-20 USDT, BCH, BSV, LTC, BNB, and XTZ (Tezos).
Our first focus was on whether these active address numbers had shown any major trends. In other words, did these projects experience significant increases or decreases within a certain period? Analyzing the correlation between the active addresses of these projects may provide insights into the broader user activity in the cryptocurrency space. Therefore, we calculated the Pearson correlation coefficient between the daily active addresses of each token from January 1, 2020, to March 23, 2020.
We found that there was no discernible pattern. In the correlation matrix above, a value of 1 indicates complete positive correlation, -1 indicates complete negative correlation, and values between -0.4 and 0.4 suggest minimal correlation. As you can see, there was almost no correlation between the active addresses of these tokens.
The only exception was between Ethereum and ERC20 USDT. However, the correlation between these two did not hold any special significance as we could expect a certain level of correlation between active addresses of Ethereum and popular ERC20 tokens due to them operating on the Ethereum blockchain.
It is evident that the active addresses of these tokens did not reflect any major trends. So, how did each token perform individually? To explore this, we compared the active addresses of each token during the same period and plotted the graph.
The information in this graph is substantial, and here are some key points we extracted for you:
- With the worsening COVID-19 pandemic, there was a noticeable increase in the active addresses of Ethereum (and Ethereum-based USDT). This could be attributed to many previously inactive users opting for USDT as a safe haven in the past few weeks, leading to a surge in active addresses.
- The active addresses of BNB also saw a slight increase.
- BSV's on-chain active addresses showed a declining trend, seemingly starting before the global market collapse that triggered the cryptocurrency market downturn.
- LTC's active addresses experienced a significant surge on March 6th to 8th. During this period, significant events did occur, such as the lockdown in Italy, California declaring a state of emergency, and the cancellation of the SXSW music festival. However, it is also possible that there is no direct causal relationship between these events.
Interestingly, the active addresses of these mainstream tokens did not show any significant changes, despite the fact that the global pandemic has already impacted millions of lives.
Original data on DApps is difficult to obtain, but a glance at the 30-day user activity on State of the Dapps shows a similar trend. Therefore, no pattern reflects changes in cryptocurrency user habits.
This may be good news. At least users have not abandoned cryptocurrencies in this crisis, which may indicate that many people believe the industry is stable enough to weather the storm. On the other hand, people have not rushed into cryptocurrencies either. While this may sound somewhat disappointing, it also suggests that mainstream expectations for the market are relatively realistic, as people are not expecting cryptocurrencies to miraculously save the traditional market.
This article is from our partner LONGHASH.
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- [Digital Gold Dominator Changed! XRP Surpasses Bitcoin, and the Correlation with Gold Prices Surges](https://www.longhash.com/cn/news/3303)
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