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As China and the United States fall in Chainalysis' global rankings, crypto adoption shifts to emerging markets

According to a study released Wednesday by Chainalysis, crypto usage has grown 23-fold worldwide in the last year, with India, Pakistan, Ukraine, and other developing countries leading the charge.

According to Chainalysis' "2021 Global Crypto Adoption Index," China and the United States are losing ground as crypto adoption leaders, due to China's continuing crackdown on crypto trading and the rising involvement of large financial institutions in crypto markets.

The annual study highlights two major trends: crypto adoption is accelerating rapidly around the world, and its use is shifting to markets that were previously less active on this front, while those at the forefront are facing significant changes in their regulatory and financial services landscapes.

Chainalysis focuses on blockchain activity by non-professional and individual crypto users rather than assessing crypto trade volume, which benefits nations with high levels of professional and institutional adoption. Rather than trading and speculation, this approach includes crypto adoption in more everyday activities, such as savings.

Vietnam, India, Pakistan, the Ukraine, and Kenya were the top-five rated nations among 154 assessed by Chainalysis based on three metrics: on-chain value received, on-chain retail value received (worth under $10,000), and peer-to-peer exchange trading volume.

Since the second quarter of 2019, the sum of all 154 nations' index scores for each quarter has increased by more than 2,300 percent by the end of Q2 2021, compared to Q3 in 2019.

“Many people in developing countries are turning to cryptocurrencies to protect their funds from currency depreciation, send and receive remittances, and conduct commercial transactions,” according to the study.

Vietnam, Kenya, Nigeria, and Venezuela, the latter two of which are also highly placed on the index, have witnessed especially high peer-to-peer (P2P) transaction volumes, adjusted by purchasing power parity (PPP) per capita. According to Chainalysis, this tendency has arisen since many individuals in those nations have restricted access to centralized exchanges and depend primarily on peer-to-peer crypto exchanges as their on-ramp to crypto.

According to the study, “many developing economies depicted here restrict the amount of national currency that citizens may transfer out of the country.” “Cryptocurrency allows those citizens to get over those restrictions and fulfill their financial needs.”

China and the United States, on the other hand, fell in the Chainalysis rankings. China, which was fourth last year, is now 13th, while the United States, which was sixth last year, is now ninth.

The primary cause of both nations' fall is a substantial decrease in their ranks in P2P transaction volume weighted for the internet-using population. China dropped from 53rd to 155th place, while the United States dropped from 16th to 109th place.

According to Chainalysis statistics, smaller, retail-sized crypto payments of less than $10,000 have dominated transactions on P2P exchanges, suggesting a drop in retail interest in crypto trading in China and the United States.

However, the causes for lower retail market involvement in China vary from those in the United States.

Retail traders in China, for example, have been subjected to additional restrictions as a result of the government's crypto trading crackdown. According to Chainalysis, the crypto industry has grown more institutionalized in the United States as more professional and big investors have entered the sector.

Whether it's the retail market or the increasing institutional presence in more developed nations, Chainalysis stated that crypto adoption has "skyrocketed" in the last 12 months, indicating that it has become a "truly global phenomena."


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