Where are the new bitcoin users in the world

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Global cryptocurrency adoption has taken off over the past year, up 881%, with Vietnam, India and Pakistan firmly in the lead, according to new data from Chainalysis.

This is the second year that the blockchain data company has released its Global Crypto Adoption Index, which ranks 154 countries based on parameters such as the volume of peer-to-peer exchange, rather than the gross volume of transactions, which typically favors developed countries with high levels of professional and institutional crypto buy-in.

The purpose of this index is to capture the adoption of crypto by “ordinary people” and “focus on use cases related to transactions and individual savings, rather than trading and speculation” . The measures are weighted to incorporate the wealth of the average person and the value for money in general in particular countries.

The top 20 countries are largely made up of emerging economies, including Togo, Colombia and Afghanistan.

Meanwhile, the United States slipped from sixth to eighth and China, which cracked down on crypto this spring, dropped from fourth to thirteenth.

Chainalysis attributes the increasing adoption levels in emerging markets to a few key factors.

On the one hand, countries like Kenya, Nigeria, Vietnam and Venezuela have huge volumes of transactions on peer-to-peer (P2P) platforms once adjusted for purchasing power parity per capita. and the population using the Internet.

Chainalysis reports that many residents use P2P cryptocurrency exchanges as their primary access to cryptocurrency, often because they don’t have access to centralized exchanges.

The report also states that residents of these countries often turn to cryptocurrency to preserve their savings in the face of currency devaluation, as well as to send and receive remittances and conduct business transactions.

Matt Ahlborg, a peer-to-peer data analyst, told CNBC that Vietnam is a top market for Bitrefill, a company that helps customers make a living off cryptocurrency by purchasing gift cards at using bitcoin.

“Vietnam stood out for me because it dominated the index,” said Chainalysis research director Kim Grauer, who wrote the report.

“We’ve heard experts say that the Vietnamese have a gambling history, and tech-savvy young people don’t have much to do with their funds in terms of investing in a traditional ETF, which both favor adoption of crypto, “Grauer continued.

Nigeria, according to Grauer, is another story. “It has a huge trading market for crypto. More and more trading is done on the cryptocurrency rails, including international trade with counterparties in China.”

These top nations have one more thing in common, according to Boaz Sobrado, a London-based fintech data analyst. “Many have capital controls or a large emigrant and immigrant population,” Sobrado said.

Take Afghanistan, a country currently in turmoil due to a recent government overthrow.

“Afghanistan on top of that makes sense from a capital control point of view, given that it is difficult to get money in and out,” Sobrado said.

The correction in purchasing power parity and gross domestic product may also have boosted its investment, given that Afghanistan is one of the poorest countries in the world.

Analysts note that it is not easy to measure the adoption of cryptocurrency at the local level.

Sobrado suggests that “the methodology has a huge blind spot, which is coincidentally Cuba”.

“Unlike many other countries, sanctioned countries do not have reliable and clear data on P2P markets,” Sobrado said.

For this reason, he thinks sanctioned jurisdictions are necessarily going to be underestimated, simply because it is more difficult to track these transactions.

Ahlborg points out that there is no perfect way to measure global crypto adoption per capita, but says this index is “one of the best we have.”

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