The blockchain is an immutable record. Companies like Chainalysis make a living out of interpreting that data, extracting value and insights from the numbers. And on-chain analysis reveals that crypto is now “a truly global phenomenon.” The data comes from Chainalysis’ 2021 Global Crypto Adoption Index. The people that really need crypto, qualified as “emerging markets” in the paper, are increasingly involved in the space.

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In The Weekly Update, our friends at Arcane Research found this to be the headline:

“Chainalysis further ranked the countries with the highest crypto adoption following their methodology. A majority of the countries featuring at the top 20 list are emerging market economies.” 

And clarifying their intention, Chainalysis’ paper itself starts with:

“While the professional and institutional markets are crucial, we want to highlight the countries with the greatest cryptocurrency adoption by ordinary people, and focus on use cases related to transactions and individual saving, rather than trading and speculation.”

That being said, we have to talk about…

The company focused on “cryptocurrency adoption by ordinary people,” so they weighted everything by purchasing power parity per capita. They ranked “all 154 countries” according to three metrics:

It’s worth clarifying that in that third one, they “rely on data supplied by two of the largest P2P platforms operating — LocalBitcoins and Paxful — to calculate each country’s P2P trade volume.” Because, for the most part, P2P trading isn’t reflexed on-chain. Chainalysis admits that “While this means that we aren’t capturing all P2P value, we believe these two exchanges are popular enough for their metrics to act as an overall approximation.”

It’s also worth noting that, “Transactions carried out by DeFi protocol users all show up on-chain, as no centralized service ever takes custody of users’ assets.” That presented a problem, because it “skewed” their rankings “toward countries with comparatively more DeFi users.” So, Chainalysis decided to leave DeFi stats out of this particular studio.

However, they promise. “We also decided to create a new DeFi Adoption Index, which will be available in the coming weeks.”

On-chain analysis reveals that:

This might sound like an obvious claim, but the surprising thing is the staggering numbers. 

“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. 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.”

Not everyone has access to a globally accepted bank account. The people who don’t have access to centralized exchanges found a way to participate in the crypto space. And are doing it in a major way. 

Not surprisingly, “analysis shows how far P2P volumes have fallen in the two countries compared to worldwide volumes.” However, according to Chainalysis, further considerations indicate that:

“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.” 

Why are Chinese people abandoning P2P trading so radically? Wouldn’t the “government crackdowns on cryptocurrency trading” cause a surge in old P2P trading instead?

Related Reading | Chainalysis: 2020 Is The Year of The Institutional Bitcoin Investor

In any case, Chainalysis concludes their study with:

“The clear takeaway though is this: Cryptocurrency adoption has skyrocketed in the last twelve months, and the variation in the countries contributing to that show that cryptocurrency is a truly global phenomenon.”

And we couldn’t agree more. It is.

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