According to a report from blockchain analysis firm Chainalysis, crypto adoption has increased by over 2,300% since Q3 2019, and by over 881% since the previous year. These variations indicate that adoption is a worldwide phenomenon. However, the report says that it remains to be seen if the adoption rate will increase on existing platforms, particularly compared with newer ones.
Chainalysis states used a methodology to rank 154 countries. They combined three metrics: on-chain crypto received, on–chain retail value transferred and peer-to–peer (P2P), exchange volume.
All three metrics are weighted according to purchasing power parity (PPP per capita); in addition, the P2P trade volume is weighted according to the number of internet users. This methodology, along with the improvements made to it last year’s report, allows for a better overview decentralized finance ( DeFi).
Institutional investment is responsible for the increase in adoption in North America, Western Europe and Eastern Asia over last year. Many crypto prices reached all-time highs during the first quarter of 2018.
Emerging markets, on the other hand, see cryptocurrency as a way for them to save money in the face currency devaluation and to send and receive remittances and to conduct business transactions.
P2P platform adoption is another important factor. Many emerging countries, such as Kenya, Nigeria and Vietnam that are high on the report’s index like Venezuela, Nigeria, Vietnam, Vietnam, and Venezuela use P2P to gain access to cryptocurrencies. They often have difficulty accessing centralized exchanges. According to the report, “Central and Southern Asia and Latin America send more traffic to P2P platforms” than regions with larger economies like Western Europe or Eastern Asia.
P2P platforms account for a larger share of total transaction volume than centralized exchanges and merchant services. They are comprised of smaller payments (under USD 10,000), fewer professional transactions and no institutional transactions.
The report concluded that both the US as well as China dropped in rankings over the past year. Their rankings in P2P volume weighted by internet-using population fell dramatically. Their decline began in June 2020. The report suggests that the increasing number of institutional investors in the US may have contributed to this trend.
The next 12 months will reveal whether or not the adoption rate increases and, if so which platforms. P2P exchanges may be preferred in emerging countries, but innovations in the DeFi space could offer new ways to bank the unbanked in the crypto industry.