Chainalysis Publishes Positive Cryptocurrency Adoption Rate for 2021

Blockchain analytics company Chainalysis has recently posted some positive data for the cryptocurrency industry in its 2021 Cryptocurrency Adoption Index, which ranks for the adoption rate of crypto in 154 countries.

The company published a preview of its 2021 Geography of Cryptocurrency report yesterday, which should get released in September. The report comprises the “2021 Chainalysis Global Crypto Adoption Index,” which is the analytics platform’s second emphasis “to measure grassroots cryptocurrency adoption around the globe.”

Chainalysis noted that its Global Crypto Adoption Index comprises three metrics. The first metric is “on-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita.” The second metric is “on-chain retail value transferred, weighted by PPP per capita.” Finally, the third metric is “peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and [the] number of internet users.”

The blockchain company explained that the main adjustment in its new cryptocurrency adoption index procedure from 2020’s index pertained to the deletion of a fourth metric, which tracked the “number of deposits by country weighted by [the] number of internet users.” Chainalysis explained that:

“We rank all 154 countries according to each of those three metrics, take the geometric mean of each country’s ranking in all three, and then normalize that final number on a scale of 0 to 1 to give every country a score that determines the overall rankings. The closer the country’s final score is to 1, the higher the rank.”

That said, the 2021 Global Crypto Adoption Index revealed that Vietnam took the number one spot in its index followed by India, Pakistan, Ukraine, Kenya, Nigeria, Venezuela, and the US.

Chainalysis Reports 881% Increase in Cryptocurrency Adoption Rate Since 2020

Meanwhile, the two largest economies—China and the US—dropped in the new overall ranking. In 2020, China held the number four position, while the US came in at number six. This year, the US dropped to the number eight spot, while China claims the thirteenth spot. Chainalysis detailed that “the biggest reason both countries dropped is that their rankings in P2P trade volume weighted for internet-using population declined dramatically — China fell from 53rd in this component to 155th, while the US fell from 16th to 109th,”

The firm added that:

“Growing transaction volume for centralized services and the explosive growth of DeFi [decentralized finance] are driving cryptocurrency usage in the developed world and in countries that already had substantial adoption, while P2P platforms are driving new adoption in emerging markets.

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…Global adoption has grown by over 2,300% since Q3 2019 and over 881% in the last year.”

 

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