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The smart folks over at Chainanalysis just gave us a glimpse of their bumper Geography of Cryptocurrency report which is due to land in September this year.
The purpose of this report, as cited by the team at CA, is to measure the adoption of crypto on planet earth at a grassroots level. In simple terms, they tell us which countries have the highest level of adoption with cryptocurrencies in a 12 month period.
What the data tells us
First off, here’s the top 20 countries with the highest adoption rates. Note that 3 metrics are used to determine ranking, these are: on-chain value received, on-chain retail value received and P2P exchange volume.
You can explore more detail on the assessment criteria here.
Key insights ??
- Clearly the adoption of crypto is skyrocketing as the report states but I’m surprised that the top 20 doesn’t feature even one country from Europe, and the UK which is the world’s 6th largest economy.
- The USA, China, Brazil and India are the only four entries that are also in the top 10 of the world’s largest economies. With the other 16 coming from developing economies, this shows that crypto is becoming an important consideration in the financial ecosystem of these emerging economies.
- China only comes into the 2021 rankings in 13th place. Which is quite a considerable drop from its position last year at 4th place. Plus, the US dropped 2 places from 6th to 8th.
- The team at CA noted “Many emerging markets face significant currency devaluation, driving residents to buy cryptocurrency on P2P platforms in order to preserve their savings. Others in these areas use cryptocurrency to carry out international transactions, either for individual remittances or for commercial use cases, such as purchasing goods to import and sell. Many emerging markets represented here limit the amount of the national currency that residents can move out of the country. Cryptocurrency gives those residents a way to circumvent those limits so that they can meet their financial needs.”
What can we gather from this
There’s a number of highlights we can delve deeper into here.
One, the crackdown in China with shutting down access to exchanges to the general public and effectively banning all mining in the country has most certainly affected their standing in the adoption of digital currencies.
We know that they hope to create a centralised government digital coin that will be forced upon residents to use as part of the controlled ecosystem already running throughout the country. But, will the outlaw of traditional assets this year have a long term effect on the government's plans to introduce their coin? Only time will tell.
And then we turn our lens to the US, where we’ve seen a lot of activity lately from the government on how to regulate crypto when it’s most certainly something that they don't understand.
This looks like (along with other news) a big factor in a slower and even declined adoption in cryptocurrencies across one of the world’s biggest nations. Interestingly, we now have the world’s two biggest economies bringing crackdowns vs some of the fastest emerging economies like India are coming to crypto with arms wide open.
Two, the adoption of crypto looks far bigger than many of us might have even known, and it’s spreading faster than ever.
We can potentially put some of the speed of adoption down to new products like DeFi and NFT’s, which are providing even more people (and especially those in developing economies) with the ability to invest in and purchase diverse assets with long term upsides.
The future is now
No matter where you land on the crypto movement, an 888% worldwide increase in adoption is extremely hard to argue against.
Where many news outlets are proclaiming that crypto is just a fad, scam and the preferred choice of exchange for criminals, couldn't’ be further from the truth. Again, the data tells us that it’s providing opportunities for those in emerging economies to create some form of financial freedom when they have significant devaluation of their own natural currency.
Like most things in this world, there are always two sides to the story and it looks like the crypto one is going to keep rolling across our planet.
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Important ??
I’m not a financial advisor, a psychologist or any from of accredited professional. As such, this is not financial advice and I’m not qualified or licensed to provide anything like this. This content is a bunch of thoughts from a fellow human for educational purposes only — that is all.
