# Finance Isn’t Enough

Source: https://x.com/blendino/status/2059621656415355067

## Summary

Reaching one billion crypto users will be difficult with financial assets alone, and the argument proposes tokenized cultural assets, tied to emotion, identity and social meaning, as the alternative. The 180 million monthly active wallets are estimated at 40-60 million real humans after a 3-5x deflation factor, so 50 million users would need an 82% CAGR over five years to reach one billion. Polymarket, with 688k monthly active users, is described as roughly where WhatsApp was in mid-2012, and stablecoin adoption may run through apps where users never hold wallets.

## Article

First of a three post series

Crypto has come a long way, and we should all be proud. Long-awaited regulatory clarity is paving the road for crypto assets to integrate meaningfully with the real world. The Overton window has shifted. We're spending less time fighting governments and more time fighting incumbent products. Crypto is working.

Now the question is, how do we best scale to the coveted one billion users and beyond? Keep in mind, the one billion users goal has been lauded for many years, so it has generally meant one billion human users. What is the likelihood of this happening in five years, as predicted in the Coinbase article?

Users

Currently, there are about 180 million monthly active wallets. That sounds pretty good, but it doesn’t tell the full story. I don’t think anyone reading this believes that means 180 million regular users of crypto products, so how many monthly active users are there really?

Power users commonly hold 3-10 wallets, and there’s a lot of bot activity focused around airdrop farming, MEV and sybil attackers. We also need to consider practically inactive accounts counted as active by misleading methodologies, such as any wallet that receives a transfer.

A reasonable deflation factor is 3-5x for the regular user base, so we can roughly estimate around 40-60 million real humans with monthly active wallets.

At 50 million users, crypto would need an 82% CAGR over 5 years to reach 1 billion users.

Tailwinds

Let’s first discuss tailwinds that could help crypto reach this goal, and why they might not be as straightforward as many think.

One tailwind is regulation. The CLARITY Act, MiCA and a softening SEC have meaningfully reduced institutional hesitation, opening the door for banks and fintechs to integrate crypto assets.

But regulatory clarity in the US and EU doesn't mean clarity everywhere. China is closed, India ambivalent and most of Africa and Southeast Asia have no coherent framework. In heavily dollarizing economies, governments may crack down specifically because stablecoins work too well, meaning adoption can trigger its own suppression.

Another tailwind is agents. Agents transacting onchain could create tens of millions of wallets without any normal adoption friction. But agent wallets inflate address counts without adding real humans, meaning the one billion number becomes achievable on paper while the real human figure stagnates.

The final tailwind is stablecoins. If stablecoins become the default for cross-border payments, wallets shift from speculation tools to utilities. This would be great, but the risk is that the most likely path to mass stablecoin adoption runs through apps where users never hold wallets. Stripe and PayPal absorbing USDC on the backend means billions transact on stablecoin rails but there’s nowhere near one billion crypto users ever holding a wallet.

Headwinds

Now let’s discuss headwinds that stand in the way.

The major headwind is there’s no killer consumer apps. Crypto still lacks its WhatsApp moment, where a product onboards hundreds of millions of people without them knowing or caring that it's crypto. Every previous adoption wave has been speculation-driven, meaning it inflates user numbers during bull markets and hemorrhages them during bear ones. Until there are consumer apps with genuine daily utility that happen to run on crypto rails, growth stays cyclical rather than compounding, and the one billion human user number remains a bull market fantasy.

@Polymarket is the notable exception, but there's a distinction worth drawing. Polymarket has undoubtedly reached mainstream awareness, but not mainstream usage. It has 688k monthly active users, roughly where WhatsApp was in mid-2012. Nobody was writing "WhatsApp is a killer app" at 688k users. They were writing it when WhatsApp reached 200 million users.

Zoomers

Zoomers were raised on social media dopamine loops. They are primed for speculation, short time horizons and have a comfort with volatility that older generations lack.

However, beneath the surface they share the same fundamental wiring as every generation before them, shaped by thousands of years of human evolution. Maslow's hierarchy of needs, which maps human motivation from survival through to self-actualization, applies just as much to a 22-year-old on TikTok as it did to any previous generation.

The desire for social belonging, esteem and recognition are not generational preferences but hardwired purchasing motivators. These motivators consistently drive consumer behavior regardless of the tools or platforms available. Products that foster community, connection and shared identity tap into some of the most powerful forces in consumer psychology.

And zoomers are no different. They still want to belong, still want to be seen and still respond to products that confer status and cultural identity. Humans make economic decisions around products because of how those products make us feel: status, belonging, happiness. We then justify them rationally. Daniel Kahneman would argue that “emotions contribute around 90% to our decisions, while logic only factors in for around 10%”.

Contrast this with the dominant asset types coming onchain: stablecoins, commodities, private credit. Do these financial assets positively resonate with people at an emotional level? No, they do not. In fact, much like other generations, the emotions zoomers attach to financial activity are anxiety and stress, leading to avoidance as a stress response.

But they do care about cultural relevance and make economic decisions based on products that relate to them emotionally and socially. Zoomers often experience positive emotions like joy and excitement when purchasing trending products that allow them to express their individuality and stay connected with current cultural movements. This underscores their desire for products that are not just functional but socially and personally fulfilling.

Verdict

It will be hard to reach one billion users with financial assets. Financial assets do not touch people emotionally or socially, and they do not confer cultural identity.

Financial assets are being legitimized and are chipping away at financial infrastructure, yet crypto still gives most people a bad taste in their mouths. At best, their sentiment is neutral and it’s irrelevant to them personally. I’m guessing you’d be hard pressed to find friends or family members using crypto or having any awareness of crypto brands. Even the notable exception of Polymarket, while widely known, is still mostly used by people who identify as traders.

But there are assets that can resonate with “the rest of us” and we’ll call them cultural assets. Cultural assets are tokenized representations of the compound output of human, social and attention capital, generated by people, objects or moments that hold meaning in social life.

There are many different types of cultural assets. Performance assets derived from athletes, musicians, etc. that reflect success in their domain of work. Creator performance assets that reflect their social media performance. Object assets that reflect the cultural relevance of a trading card or collectible. Time assets as claims on a person’s time. Note cultural assets also include a subset of prediction and perps markets centered around culturally relevant things, such as betting on which artist will produce the next big hit or who wins Love Island.

Consider the following heuristics when assessing crypto assets. Do your college friends, cousins or neighbors care about this topic? Would they want you to share your experience with them? Are there social or emotional elements to the assets, rather than purely financial elements?

For most of the products I’m aware of, even the ones touted by CT, the answer is no. This needs to change, or it will be extremely difficult to scale crypto to one billion users.

In my next article, I’ll walk through what’s happening in different market segments and assess previous cultural asset experiments to illustrate how future versions can succeed.