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  • J McGlynn and M Bacina

Grassroots of crypto adoption are not where you expect: Chainalysis releases new report

Updated: May 3

After a year of enormous growth for cryptocurrency markets and increased global attention for the industry, Chainalysis has released its second report on the Geography of Cryptocurrency pinpointing which countries are responsible for the highest levels of cryptocurrency adoption based on individual usage rather a country’s macroeconomics.

While Australia was not a name mentioned in the top 20 winners (coming in at number 38) a fascinating aspect of this report is the countries most responsible for grassroots adoption is Vietnam in 1st place, India as 2nd, Pakistan in 3rd, Ukraine in 4th and Kenya in 5th place.

Chainalysis explains:

The goal of our index is to provide an objective measure of which countries have the highest levels of cryptocurrency adoption. One way to do that would be to simply rank countries by transaction volume. However, that would favor only the countries with high levels of professional and institutional cryptocurrency adoption, as those market segments move the largest sums of cryptocurrency.

Chainalysis surveyed 154 countries to spotlight adoption by ordinary people, concentrating on use cases related to transactions and individual saving, rather than trading and speculation.

The methodology used three metrics to determine the ranking:-

  1. On-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita: This means Chainalysis estimated the total crypto activity of each country and determined the significance of that value based on the measure of the country’s wealth per residence i.e. “If two countries had two countries with equal cryptocurrency value received, the country with the lower PPP per capita would rank ahead.”

  2. On-chain retail value received, weighted by PPP per capita – This metric focuses on non-professional cryptocurrency traders. It’s the same as the metric above, but instead uses retail transactions, which saw Chainalysis approximate the total cryptocurrency activity of every day crypto users in each country and rank each country based on their PPP. Once again, the country with a lower PPP per capita would win over another country with the same total of crypto moved in retail transactions.

  3. Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and number of internet users – This metric took the P2P trade volume of each country and weighted the values with PPP and the average internet usage of each person. Once again, the goal here was to determine which country had higher uptake rates of cryptocurrency usage, based on individual wealth and access per person

Once all the data was collected and taken into account the top ten were as follows:-

To download the full report for a view of the full list of countries and their ranks, you can visit this link.

Some insights

The report dives deeper into each country and the nature of their cryptocurrency adoption, but it also highlights some interesting high level trends around global cryptocurrency adoption, some including:-

  1. Global adoption has grown by over 2300% since Q3 2019 and over 881% in the last year.

  2. The reasons for cryptocurrency's “skyrocketing adoption” varies between countries - in emerging markets, many turn to cryptocurrency to: preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions; but in countries like: North America, Western Europe, and Eastern Asia, this years increased adoption has been driven largely by institutional investment.

  3. Emerging markets like Vietnam and Kenya - who dominated the survey by taking out spots in the top 5, are largely ranking highly because their residents often don’t have access to centralised exchanges/ alternatives.

  4. China and the U.S have fallen down the ranks because their their rankings in P2P trade volume weighted for internet-using population have fallen dramatically – last year China ranked fourth on Chainalysis’s report while the U.S. ranked sixth. This year, China ranks 13th while the U.S. ranks eighth.

A global movement towards a more transparent blockchain economy

Like other Chainalysis reports, this is sound analysis from a highly regarded data-driven company to help build a greater understanding of legitimate cryptocurrency usage.


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