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The blockchain is an immutable record. Companies like Chainalysis make a living by interpreting data and extracting value and insight from numbers. On-chain analysis shows that encryption is now “A truly global phenomenon.“Data from Chainalysis’s 2021 Global Encryption Adoption Index. People who really need encryption, called “emerging markets” in the paper, are increasingly involved in this field.
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In the weekly update, our friends In Arcane Research Found that this is the title:
“Chainalysis further ranked the countries with the highest encryption adoption rates according to their methodology. Most of the countries in the top 20 are emerging market economies.”
To clarify their intentions, Chainalysis’s paper itself starts with:
“Although the professional and institutional markets are crucial, we want to emphasize the countries where ordinary people adopt the most cryptocurrency, and focus on use cases related to trading and personal savings, rather than trading and speculation.”
Having said that, we must talk about…
BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
What is the methodology of Chainalysis?
The company focuses on “Ordinary people adopt cryptocurrency, “So they use per capita purchasing power parity to measure everything. They rank”All 154 countries“According to three indicators:
- Value of cryptocurrency on the chain received, Weighted by purchasing power parity (PPP) per capita.
- Retail value transfer on the chain, Weighted by per capita purchasing power parity.
- Peer-to-peer (P2P) exchange trading volume, Weighted by per capita purchasing power parity and the number of Internet users.
It’s worth clarifying that in the third, they “Relying on the data provided by the two largest P2P platforms-LocalBitcoins and Paxful-to calculate the P2P transaction volume of each country. “Because, in most cases, P2P transactions are not reflected on the chain. Chainalysis admits,”Although this means that we did not capture all the P2P value, we believe that these two exchanges are popular enough that their indicators can be used as an overall approximation.“
DeFi is not part of the studio. DeFi statistics will be released soon
It’s also worth noting that “The transactions made by users of the DeFi protocol are all displayed on the chain, because there is no centralized service that will keep users’ assets.“This poses a problem because it “biased” their rankings to “biased countries with relatively more DeFi users.” Therefore, Chainalysis decided to exclude DeFi statistics from this particular studio.
However, they promised. “We also decided to create a new DeFi adoption index, which will be launched in the coming weeks.“
Global Crypto Adoption Index 2021 | Source: Arcane Research
Chainalysis identified three main trends
On-chain analysis shows:
- Global cryptocurrency adoption rate soars
This sounds like an obvious proposition, but it is surprisingly a staggering number.
“At the end of the second quarter of 2020, after a period of small growth, according to the country index scores we summarized, the overall global adoption rate was 2.5. By the end of the second quarter of 2021, the total score was 24. Since the third quarter, the global adoption rate has increased by more than 2300%, and last year it increased by more than 881%.”
- With the support of the P2P platform, the adoption rate in emerging markets continues to increase
Not everyone has access to globally recognized bank accounts. People without access to centralized exchanges have found a way to participate in the crypto space. And this is being done in a major way.
- China and the U.S. dropped in our rankings
This is not surprising,”The analysis shows how much P2P transaction volume in these two countries has fallen compared with global transaction volume.However, according to Chainalysis, further consideration shows that:
“This activity may reflect the increasing professionalization and institutionalization of cryptocurrency transactions in the United States, and in China, this may be related to the continued government crackdown on cryptocurrency transactions.”
Why are the Chinese so aggressively abandoning P2P transactions? Is it “The government cracks down on cryptocurrency transactions“Causing the old P2P transactions to surge?
Related Reading | Chainalysis: 2020 is the first year of institutional Bitcoin investors
In any case, Chainalysis’s research conclusion is:
“Nevertheless, the clear conclusion is that the adoption of cryptocurrency has soared in the past 12 months, and the changes in the countries that led to this indicate that cryptocurrency is a truly global phenomenon.”
We totally agree. This is.
Global Crypto Adoption Index | Source: Chainalysis
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