According to recent Chainalysis data, global cryptocurrency adoption increased 881 percent last year, with Vietnam, India, and Pakistan leading the way.
The Global Crypto Adoption Index rates 154 countries based on indicators like peer-to-peer exchange trading volume rather than gross transaction volume, which favors industrialized nations with significant professional and institutional crypto buy-in.
Aiming to capture “ordinary people’s” adoption of crypto, the index would “focus on use cases relating to transactions and individual saving, rather than trading and speculation.” The measurements are weighted to reflect average wealth and the worth of money in various countries.
Among the top 20 are Togo, Colombia, and Afghanistan.
The US slid from sixth to eighth, and China, which cracked down on crypto this spring, fell from fourth to thirteenth.
Chainalysis attributes increased adoption in emerging regions to several variables.
For one, when adjusted for purchasing power parity per capita and internet usage, nations like Kenya, Nigeria, Vietnam, and Venezuela have high P2P transaction volumes.
A lot of residents use P2P bitcoin exchanges because they don’t have access to centralized exchanges.
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According to the survey, many people in these countries use bitcoin to save money, send and receive remittances, and conduct business.
According to a peer-to-peer data analyst, Bitrefill, which enables users survive on cryptocurrency by buying gift cards with bitcoin, is one of the top marketplaces in Vietnam.
“Vietnam stood out because it dominated the index,” said Kim Grauer, Chainalysis’ director of research.
Folks in Vietnam have a history of gambling, and the young, tech-savvy people don’t invest in normal ETFs, Grauer said.
Grauer says Nigeria is unique. “It has a massive crypto market. Cryptocurrency is being used for more and more transactions, including international trade with China.
Boaz Sobrado, a London-based fintech data researcher, says these top-ranked nations have another trait. A strong emigrant and immigrant population or capital controls, he argued.
Consider Afghanistan, where the Taliban recently overthrew the government.
“Afghanistan on top makes sense from a capital controls perspective,” Sobrado said.
Given that Afghanistan is one of the world’s poorest countries, the adjustment for PPP and GDP may have helped it.
Analysts say gauging grassroots cryptocurrency acceptance is difficult.
“The technique flawed,” Sobrado remarked. No data on P2P markets are available for sanctioned countries, unlike many others.
Because of this, he believes sanctioned states like Cuba will be underestimates.
However, this metric is “one of the best we have,” according to Ahlborg.