Chainalysis found that bitcoin use has increased in developing countries as citizens seek to protect themselves from the currency’s depreciation.
Global adoption of bitcoin and cryptocurrency has exploded in a year, up more than 880%, according to new data from Chainalysis. The company’s Global Crypto Adoption Index was released yesterday with data from July 2020 through June 2021 to show how active countries around the world are in Bitcoin.
The index weights the data to prevent it from being biased in favor of developed countries with large volumes of transactions from professional and institutional players. Instead, the goal is to “highlight the countries with the greatest adoption of cryptocurrency by ordinary people, and focus on use cases related to transactions and individual savings,” rather than trade and speculation “.
Chainalysis revealed that Vietnam had the highest adoption of cryptocurrency, leading the 154 countries analyzed and rated on a scale of 0 to 1. Second place, India, got 0.37, followed by Pakistan, with a score of 0.36.
The data analytics company uses three metrics to determine a country’s score. The value received in chain, weighted by purchasing power parity (PPP) per capita, seeks to determine the importance of the total volume of cryptocurrency activity in a country relative to its wealth per capita.
A second metric, the chain transferred market value – also weighted by PPP per capita – aims to measure the activity of individual non-professional users against the wealth of the average person.
The last measure measures the volume of peer-to-peer exchange (P2P) exchanges, weighting it by PPP per capita and the number of Internet users in the country. The goal of the third metric is to try to highlight countries where more residents are putting more of their wealth into P2P transactions.
Not only did the study find that global bitcoin adoption is skyrocketing, having increased 2,300% since Q3 2019, but also how emerging markets are turning to bitcoin to preserve their economies in the face of severe devaluation. of the national currency. In contrast, adoption in North America, Western Europe and East Asia has been primarily driven by institutional players.
While financially privileged investors in developing countries reject the use of Bitcoin as a currency, those in Vietnam, Kenya, Nigeria and Venezuela are showing how bitcoin is their best bet. Citizens in developing countries around the world are already choosing to use bitcoin on a daily basis to store and exchange value. It is only a matter of time for such use cases to spread across the world, triggering the use of bitcoin as a unit of account.
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