According to the cryptanalysis company Chainalysis, the worldwide acceptance of cryptocurrencies among individual investors has increased significantly in the past year.
Taking into account factors such as peer-to-peer exchange trading volume and the value received, Chainalysis said that global cryptocurrency adoption has increased 881 percent over the past 12 months.
The company views institutional markets as critical, but aims to highlight the countries with the greatest acceptance of cryptocurrencies by retail investors. It focused on use cases related to transactions and individual saving rather than trading and speculation. The top rated countries are Vietnam, India, Pakistan and Ukraine.
“In emerging markets, many are turning to cryptocurrencies to save their savings in the face of currency depreciation, send and receive remittances, and conduct business transactions,” Chainalysis said in the report. It added that “adoption in North America, Western Europe and East Asia last year was largely driven by institutional investment”.
Interest in cryptocurrencies has increased since the pandemic began, in part due to significant gains from digital tokens like Bitcoin and Ether. The Bloomberg Galaxy Crypto Index rose around 380 percent over the past year. Bitcoin price in India was Rs. 34.71 Lakhs while Ethereum price in India was Rs. 2.34 lakhs from 10 a.m. IST on August 19th.
The Chainalysis Global Crypto Adoption Index ranked 154 countries according to three main metrics. Both China and the US have fallen behind in the rankings, largely as peer-to-peer trade volumes have declined. Last year, China was fourth and the US sixth. This year, the USA ranks eighth and China thirteenth.
Chainalysis has removed a previously used factor: the number of deposits by country, weighted by the number of internet users. The company found that it distorted the ranking of countries with comparatively more decentralized financial or DeFi users. Instead, it is creating a DeFi adoption index that will be available in the coming weeks.
“The growing volume of transactions for centralized services and the explosive growth of DeFi are driving the use of cryptocurrencies in developed countries and countries that have already had significant adoption, while P2P platforms are driving the new adoption in emerging markets,” Chainalysis said, adding one Another key question is whether new approaches will break these trends.
© 2021 Bloomberg LP
Interested in cryptocurrency? We discuss everything about crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music, and anywhere you get your podcasts.