The Business Times

Crypto adoption levels off amid bear market, emerging markets lead Chainalysis’ adoption index

Kelly Ng
Published Wed, Sep 14, 2022 · 06:00 PM

OVERALL crypto adoption has levelled off in the last year amid a bear market, after growing consistently since mid-2019. But it remains above pre-bull market levels, according to blockchain data platform Chainalysis.

Global adoption of cryptocurrency reached its current all-time high in Q2 last year. Adoption has fluctuated since. It fell in Q3, which also saw crypto price declines, rebounded in Q4 when prices rebound to new highs, and fell in each of the last 2 quarters.

This suggests that long-term cryptocurrency holders have continued to hold through the bear market. While their portfolios have lost value, those losses are not locked in yet because they have not sold their crypto.

Vietnam takes the top spot on the annual index with a score of 1, while the Philippines, coming in second, is scored 0.75. Ukraine is at third place with 0.69.

The index, published for the third time, looks at on-chain cryptocurrency value centralised exchanges received, on-chain retail value at such exchanges, peer-to-peer exchange trade volume, on-chain crypto value received from DeFi protocols, and on-chain retail value received from DeFi protocols. These values are then weighted by purchasing power parity per capita.

Half of the top 20 ranked countries, including the top 3, are lower-middle income countries. Eight of them, including Thailand (10th) and China (8th), are upper-middle income countries, while 2 – the US and UK – are high income countries.

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Singapore did not make the top 20.

Users in lower-middle and upper-middle income countries often rely on cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and fulfil other financial needs unique to their economies. These countries also tend to lean on Bitcoin and stablecoins more than other countries, said the Chainalysis team.

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