Crypto adoption 2022: Top countries, results, trends & lessons

Did you know that Vietnam is the country with the highest adoption of cryptocurrencies? Did you know that the DeFi sector is particularly developing in the United States and the United Kingdom? At the start of 2023, it is an opportunity to look at the figures for 2022. In this article, we will take stock of the adoption of cryptocurrencies in the world. We will also analyze the trends that emerge, discover the most popular cryptocurrencies and make a top 20 of the countries with the highest adoption in proportion to their population and their wealth.

Source: Chainalysis, the flagship company for the traceability of cryptocurrencies

Throughout this article, we will cite the excellent report from Chainalysis in the year 2022. Chainalysis is a young American company, founded in 2014. It has grown rapidly thanks to its blockchain analysis services. By analyzing cryptocurrency transactions, she conducts investigations into illegal cryptocurrency-related activities and provides compliance advisory services. The surveillance company has become a major player in this sector with very important customers. Its clients include the Federal Bureau of Investigation, the Drug Enforcement Agency and the Internal Revenue Service Criminal Investigation of the United States, as well as the National Crime Agency of the United Kingdom. It is also at the forefront of the fight against the financing of terrorist activities. In May 2022, the company raised $170 million for an estimated valuation of $8.6 billion.

The unit of measurement: the Global Crypto Adoption Index

How to measure the adoption of cryptocurrencies? This is a very tricky question. For example, one could measure the proportion of companies and individuals who hold cryptocurrencies or the amount they hold. We could also look at the volume of transactions during the year within each country. This would reflect where crypto activity is the most virulent. However, this is not the indicator used by Chainalysis. Indeed, if we are only interested in transaction amounts, it is not surprising that they are higher for developed countries than for emerging countries. Have to consider the level of wealth and the number of inhabitants from each of the 146 countries. Chainalysis therefore analyzes the volumes in relation to the average wealth of the citizens of the country.

The company has designed its own unit of measurement. It rests on 5 pillars of equal importance which are analyzed according to volumes in purchasing power parity per capita (Purchasing Power Parity per capita):

  • The amount received on centralized exchanges (CEX) weighted by purchasing power parity per capita. Concretely, this sub-index measures the crypto activity of institutions and individuals weighted by the level of wealth and the population of the country.
  • The amount held on centralized exchanges (CEX) by individuals weighted by purchasing power parity per capita. Simply put, this indicator measures how much an average citizen receives and holds on CEX compared to the country’s average purchasing power.
  • Peer-to-peer (P2P) trading volume weighted by PPP per capita and number of internet users. This index highlights countries where a large number of residents devote a significant portion of their wealth to P2P cryptocurrency transactions. A P2P transaction consists of two individuals directly exchanging cryptocurrencies without going through a third party.
  • The total amount of transactions in DeFi (decentralized finance) weighted by purchasing power parity per capita. Concretely, this sub-index measures the DeFi activity of institutions and individuals weighted by the level of wealth and the population of the country.
  • The total amount of transactions in the DeFi of individuals weighted by purchasing power parity per capita. Put simply, this metric measures how much an average citizen has invested in DeFi relative to the country’s average purchasing power.

A top 20 of crypto adoption dominated by emerging countries

Using this indicator, chainalysis has compiled a top 20 countries with the best Global Crypto Adoption Index.

  1. Vietnam
  2. Philippines
  3. Ukraine
  4. India
  6. Pakistan
  7. Brazil
  8. Thailand
  9. Russia
  10. China
  11. Nigeria
  12. Turkey
  13. Argentina
  14. Morocco
  15. Colombia
  16. Nepal
  17. United Kingdom
  18. Ecuador
  19. Kenya
  20. Indonesia

As in 2021, emerging countries dominate this ranking. In particular, if we stick to the World Bank’s categorization (high-income countries, upper middle income, lower middle income, low income), middle-income countries (upper or lower) are over-represented in this ranking. 18 in the top 20!

Within these middle-income countries, cryptocurrency holders use them to secure their savings in a context of high volatility of their national currency, make fund transfers (an alternative to bank transfers) and fulfill various financial needs specific to the situation in their country.

Besides, users in these countries tend to own more bitcoin (BTC) or stablecoins than the rest of the world. Thus, they prefer to hold the cryptocurrencies considered to be the safest and most stable.

Source: Chanalysis 2022 Global Crypto Adoption Report

Analysis of crypto adoption in Vietnam

As in 2021, Vietnam climbs to first place in this cryptocurrency adoption ranking. Indeed, the Vietnamese are proportionally very numerous to invest a large percentage of their purchasing power in cryptocurrencies and DeFi… In particular, Games play-to-earn (P2E) and move-to-earn (M2E) are extremely popular in Vietnam. For example, Axie Infinity, probably the most famous and lucrative play-to-earn, is Vietnamese. Additionally, in 2020, a survey revealed that 21% of Vietnamese owned cryptos. This percentage ranked them second behind Nigeria. And, this percentage has certainly increased over the past two years.

Analysis of crypto adoption in the United States

The United States has moved up to fifth in this ranking, from eighth in 2021 and sixth in 2020. In fact, the United States ranks in the top three of four sub-indices. In fact, it is only for the peer-to-peer (P2P) exchange volume sub-index weighted by PPP per capita and the number of internet users that they are poorly positioned (111e place). Nothing surprising for this country with very strong purchasing power. The United States is by far the highest ranked developed country on the list. This very good ranking is explained above all by US dominance over DeFi activities.

North America (especially the United States) is the region that has most strongly adopted DeFi.  On the other hand, this also had the effect of making it the region where the dominance of bitcoin decreased the most during the year.
North America (especially the United States) is the region that has most strongly adopted DeFi. On the other hand, this also had the effect of making it the region where the dominance of bitcoin decreased the most during the year.

Analysis of crypto adoption in China

China returns to the top 10. It was 13e in 2021. Indeed, the Celestial Empire is particularly distinguished by its extensive use of centralized exchanges. This result is all the more interesting considering of the regime’s crackdown on crypto activities and the notorious ban cryptocurrency trading since September 2021. Thus, this figure is very revealing: “this ban has been either ineffective or poorly enforced”.

Analysis of Crypto Adoption in Ukraine

Ukraine ranks third. Nothing too surprising. In this context of warof high inflation (close to 30%) of the hryvnia, the national currency, and the impossibility of converting it into other currencies, BTC provides more security and opportunities for Ukrainians. Moreover, in September 2022, the UN published a ranking of countries according to the percentage of the population that holds bitcoin. Ukraine came first, followed by… Russia.

Analysis of crypto adoption in France

What about our hexagon? He ranks 32e place of this ranking… Admittedly, this indicator weighs more emerging countries which have a strong adoption of cryptocurrencies than developed countries. Nevertheless, it is interesting to see that the United States and the United Kingdom are better ranked than France.

Latin America Analysis

Latin American countries received $562 billion in crypto in 2022. This represents a 40% increase from 2021. 5 Latin American countries are in the top 30: Brazil (7), Argentina (13), Colombia (15), Ecuador (18) and Mexico (28). Overall, cryptocurrencies are adopted in Latin America for three main reasons:

  • Fund transfers (alternative to bank transfers).
  • Savings. By holding cryptocurrencies, they want to maintain the value of their savings over time despite inflation that hit these countries. For example, Argentina has been facing an inflation problem for several decades (79% inflation in 2022), to circumvent this problem, Argentinians are massively adopting stablecoins. In addition, USDT and USDC are pegged to the dollar (the preferred currency of Argentines), easy to access (because digital) and there is no limit for converting pesos into stablecoins.
  • The pursuit of profit.

Analysis of central, western and northern Europe

Europe (disregarding Eastern countries) is still a core region for crypto activity. Western, Central and Northern European countries received $1.3 trillion in crypto in 2022. Western European countries in particular are performing best (Great Britain, Germany, France , Spain, Portugal and the Netherlands). It is interesting to notice that European countries are advanced in DeFi, NFTs and regulation. Besides, crypto activity in Germany increased by 47% due to the 0% tax on long-term capital gains and the legal authorization to invest in cryptocurrencies for various institutions.

Thus, it is interesting to see the different reasons behind the adoption of cryptocurrencies. Although young, the crypto sector already has sub-segments that are valued heterogeneously across regions. In addition, in another register, we have written an article on the Crypto fundraisers of 2022: Top 10, results, trends and lessons. As well as another article on Hacks and Frauds in 2022: Top 10, review, trends and lessons.

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