The blockchain is an immutable record. Companies like Chainalysis make a living interpreting this data, extracting value and insights from the numbers.
Chainalysis report reveals that cryptocurrency became “global” in 2021, data comes from 2021 Global Crypto Adoption Index of Chainalysis. People who really need cryptocurrencies, qualified as “emerging markets” on paper, are increasingly involved in space.
In the weekly update, our friends at Arcane Research discovered that this was the headline:
“Chainalysis further ranked the countries with the highest adoption of cryptoactives according to its methodology. Most of the countries that figure in the top 20 are emerging market economies. ”
And clarifying its intention, the Chainalysis article begins with:
“While professional and institutional markets are crucial, we want to highlight countries with the highest adoption of cryptocurrencies by ordinary people and focus on use cases related to individual transactions and savings rather than trade and speculation.”
What was the Chainalysis methodology?
- Chainalysis report reveals that cryptocurrency became “global” in 2021.
The company focused on “ cryptocurrency adoption by common people ”, then weighted everything by purchasing power parity per capita. They rated “ all 154 countries ” according to three metrics:
Value received from cryptocurrency in the network, weighted by purchasing power parity (PPP) per capita.
Retail value transferred in the network, weighted by PPP per capita.
Point-to-point exchange (P2P) trade volume, weighted by PPP per capita and number of Internet users.
It is worth clarifying that, in that third, they ” rely on data provided by two of the largest P2P platforms in operation – Local Bitcoins and Paxful – to calculate the volume of P2P commerce in each country ”. Because, for the most part, P2P trading is not reflected in the chain. Chainalysis admits that.
“While this means we’re not capturing all the P2P value, we believe these two echanges are popular enough that their metrics act as a general approximation. ”
DeFi is not part of the studio. DeFi Stats coming soon
It is also important to note that, “the transactions performed by users of the DeFi protocol all appear in the chain, as no centralized service takes custody of the users’ assets. “That was a problem, because” distorted ”its ratings towards countries with comparatively more DeFi users. So Chainalysis decided to leave DeFi’s stats out of this particular studio.
However, they promise.
“We’ve also decided to create a new DeFi Adoption Index, which will be available in the coming weeks.”
Chainalysis identified three main trends
The on-chain analysis reveals that:
- Global adoption of cryptocurrency is skyrocketing.
This may sound like an obvious statement, but what is surprising is the staggering numbers.
“At the end of the second quarter of 2020, after a period of low growth, total global adoption was 2.5 based on our combined country index scores. At the end of Q2 2021, that total score was 24, suggesting that global adoption has grown more than 2300% since Q3 2019 and more than 881% last year. ”
Adoption in emerging markets grows, driven by P2P platforms
Not everyone has access to a globally accepted bank account. People who don’t have access to centralized exchanges have found a way to participate in cryptospace. And they are doing it in an important way.
China and USA fall in our rankings
Not surprisingly, “the analysis shows the extent to which P2P volumes have fallen in both countries compared to world volumes. “However, according to Chainalysis, other considerations indicate that:
“This activity may reflect the increasing professionalization and institutionalization of the cryptocurrency trade in the United States and, in the case of China, it may be related to continued government crackdowns on the cryptocurrency trade.”
Why are the Chinese abandoning P2P commerce so radically?
THE ” government crackdown on cryptocurrency trade ” wouldn’t cause an increase in former P2P commerce?
In any case, Chainalysis concludes its study with:
“The clear conclusion is this: cryptocurrency adoption has skyrocketed over the past twelve months and the variation in countries contributing to it shows that cryptocurrency is a truly global phenomenon.”
And we couldn’t agree more. This is.