China, US Dip As Global Crypto Adoption Grow By 2300%
Despite reporting global cryptocurrency adoption skyrocketing, China and the U.S. dropped in their global adoption index ranks, latest data from blockchain data platform, Chainalysis shows.
Crypto adoption grows 800% in one year
The firm’s data shows that residents of more and more countries around the world are taking the dive into cryptocurrency or seeing existing adoption increase.
The increased adoption particularly in the last twelve months, and the variation in the countries contributing to it show that cryptocurrency is a truly global phenomenon, it adds.
“At the end of Q2 2020, following a period of little growth, total global adoption stood at 2.5 based on our summed up country index scores,” the firm states. “At the end of Q2 2021, that total score stands at 24, suggesting that global adoption has grown by over 2300% since Q3 2019 and over 881% in the last year.”
China, US drop in P2P transactions
In emerging markets, the increased adoption is as a result of cryptocurrency being used to preserve savings against currency devaluation, for remittances and business transactions. Adoption in North America, Western Europe, and Eastern Asia has been powered largely by institutional investment.
Countries like Kenya, Nigeria, Vietnam, and Venezuela rank high in large part because of their huge peer-to-peer (P2P) transaction volumes when adjusted for PPP per capita and internet-using population.
Unlike last year though, when China and the US were ranked fourth and fifth respectively on the Chainalysis global adoption index, the two countries are now in the eighth and thirteenth positions.
The drop is driven mainly by decreases in P2P trade volume weighted for internet-using population, Chainalysis says. China fell from 53rd in this component to 155th, while the U.S. fell from 16th to 109th.
P2P transaction volume for both countries started to diverge and shrink against the rest of the world around June 2020 to further dip more and remain lower than worldwide totals.
“This activity may reflect increasing professionalization and institutionalization of cryptocurrency trading in the United States, and in China’s case may be related to ongoing government crackdowns on cryptocurrency trading,” Chainalysis states.
China’s previous ban on crypto-related transactions in 2017 has been expanded in scope in the past year. By May this year, the measures got tightened after the 51st meeting of the Financial Stability and Development Committee of the State Council presided over by Vice Premier, Liu He.
A summary of the meeting indicates China’s readiness to punish financial activities it deems illegal and criminal – crypto transactions affected
It also shows the seriousness attached as the clamp down on activities deemed illegal in the securities market marked the first time it came directly from the ruling Council and with the VP as the most senior Chinese official.
The measures came just days after three major finance-related bodies in China released a statement warning investors against engaging in speculative crypto trading.
Adoption index key change
The index used three metrics to rank all 154 countries. They are on-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita; on-chain retail value transferred, weighted by PPP per capita; and Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and number of internet users.
A fourth metric – number of deposits by country weighted by number of internet users – that contributed to each country’s overall ranking in 2020 was not included in this year’s index.