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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