The adoption rate of cryptocurrencies has skyrocketed: over 1,000% in one year. Contrary to what one might think, it is not in the United States or in China that it is highest.
Cryptocurrencies are popular on social networks. But to what extent exactly are they used and where? This is what the 2021 global cryptocurrency adoption index reveals that Chainalysis is about to publish on August 18 – and of which we were able to have a preview. The analyst firm indicates that the sector has boomed: the adoption rate of crypto has increased by 1,900% since the second quarter of 2019 and 1,200% in the last twelve months alone.
The reasons people turn to cryptocurrency differ greatly from country to country. ” In emerging markets, many people are turning to cryptocurrencies to protect their personal savings amid deflation, send and receive funds, and conduct business transactions. », Says Chainalysis. Conversely, in the countries of North America, Western Europe and East Asia, the rise of cryptocurrencies is mainly driven by institutional investors.
The countries with the highest adoption of cryptocurrencies are not necessarily the ones we think about instinctively. If China and the United States have been talked about a lot on this subject, they are not the countries where the adoption rate of crypto is the highest.
Chainalysis took several factors into account in establishing its ranking. According to the firm, ranking the countries based solely on transaction volume would not have given a precise landscape of the situation: it would mainly highlight countries where the adoption of cryptocurrencies by companies and institutions is high. It is indeed these entities which displace the most significant sums. ” These players are crucial, but we also wanted to see in which countries the general public adoption rate is important and focus more on transactions and individual savings, not just trading and speculation. », Explains Chainalysis.
Vietnam, India and Pakistan on the podium
For this reason, the 2021 Global Cryptocurrency Adoption Index ranks the 154 countries studied according to three parameters:
- The perceived value on the blockchain weighted according to the purchasing power parity method per capita. If the total value received by two countries is equivalent, the country with the lowest purchasing power per capita will be ranked higher
- The value of “retail” transfers on the blockchain, weighted according to purchasing power parity per capita. To estimate the activity of non-professional users, Chainalysis here focuses on transactions with a value of less than $ 10,000.
- Trading volumes on Peer-to-peer platforms, weighted according to purchasing power parity per capita and by the number of Internet users. As Chainalysis points out, exchanges on P2P platforms are not mentioned on blockchains, but they still represent a significant percentage of crypto activity, especially in emerging countries.
If we take these different factors into account, we see that the three countries with the highest rate of adoption of cryptocurrencies are Vietnam, followed by India and Pakistan. The United States is ultimately only in 8th position (even if it is the country that made the most profits thanks to bitcoin in 2020). As for China, the world’s leading mining hub until it ordered the closure of most crypto farms, it only came 13th in terms of cryptocurrency adoption.