Countries that use Bitcoin every day : Focus on those nations that are already experiencing a monetary revolution
September 3, 2021 6:40 AM
Chainalysis’s latest research into Bitcoin (BTC) and cryptocurrency adoption in 154 countries shows emerging market dominance in the top 20 rankings.
Preview of a report: a methodology to understand
On August 18, 2021, the Chainalysis team blogged an overview of their research report on cryptocurrency adoption in 154 countries in 2021. The full version of the report will be released in September 2021.
The study looks at savings and cryptocurrency transactions rather than trading and speculation. The researchers are not only interested in the volume of transactions by country, because this criterion would favor countries that have a relatively high number of institutional and professional investors in cryptocurrencies, whose average transaction amounts are far greater than those of individuals.
To rank countries based on their population adoption of cryptocurrencies, Chainalysis designed a global index ranging from 0 to 1 based on the geometric mean of 3 parameters. The top-ranked country is the one with the score closest to 1. The analysis period runs from July 2020 to June 2021.
- The first measure at the base of the index calculates the total volume of cryptocurrencies received on chain by a country relative to the purchasing power parity (PPP) per capita.
- The second indicator looks at on-chain transactions of less than $ 10,000 - and therefore probably carried out by an individual - received by a country in relation to PPP per capita.
- The last indicator concerns the volume of off-chain P2P transfers in relation to the PPP per capita and the number of internet users. Transaction data comes from 2 P2P platforms: LocalBitcoins and Paxful.
Rise in emerging countries, fall of China and the United States
The research revealed 3 key trends.
The first is the acceleration of cryptocurrency adoption globally with growth of around 2,300% since the third quarter of 2019 and over 881% in the previous observation period. Emerging markets are increasingly turning to cryptocurrencies to protect themselves from the devaluation of their fiat currencies, as well as to send or receive money and to conduct business transactions. In North America, Western Europe and East Asia, institutional investors have been the driving force behind the adoption of cryptocurrencies in 2020.
The second trend that emerges from the study is that emerging countries, including Kenya, Nigeria, Vietnam and Venezuela, lead the rankings for P2P transactions relative to PPP per capita. Many emerging market cryptophiles do indeed use P2P platforms to buy or sell cryptocurrency, as they typically do not have access to centralized exchanges.
Ranking of countries according to the adoption of cryptocurrencies according to 3 factors - Source: Chainalysis
Chainalysis research has finally shown China and the United States to fall in the rankings, dropping from fourth and sixth place respectively in 2020, to 13th and 8th place in 2021. These results can be explained. by a drop in the volume of transactions on P2P platforms adjusted to PPA and the number of internet users in these countries.
This Chainalysis report aligns with that of 2020, already showing at the time a growing adoption of cryptocurrencies in emerging countries, especially in Eastern European countries.