On September 14, the blockchain data platform Chainanalysis released for a third consecutive year a report covering crypto adoption around the globe.

Report Summary

The Crypto Adoption Index shows that global adoption of cryptocurrency has slowed in the past year, but remains higher than pre-bull market levels.

Adoption reached an all-time high in Q2 2021, but has fluctuated in waves since then due to changes in cryptocurrency prices.

Many people who invested in cryptocurrency during the bull market in 2020 and 2021 have continued to invest a significant portion of their assets in digital assets, despite the recent bear market.

The index also shows that emerging markets, specifically lower middle income and upper middle income countries, dominate the top rankings, with Vietnam, the Philippines, and Ukraine ranking highest. These countries often rely on cryptocurrency for remittances and financial stability in times of fiat currency volatility. The United States and United Kingdom are the only high income countries in the top 20 rankings.

Vietnam On Top

According to the Crypto Adoption Index, Vietnam has the highest adoption rate of cryptocurrency in the world for the second consecutive year. The country has a high purchasing power and population-adjusted adoption of centralized, DeFi, and P2P cryptocurrency tools.

Polling from 2020 found that 21% of Vietnamese consumers reported using or owning cryptocurrency, and this rate is likely to have increased since then. Cryptocurrency-based gaming, including play to earn (P2E) and move to earn (M2E) games, are particularly popular in Vietnam. The top-grossing P2E game, Axie Infinity, is based in Ho Chi Minh City, and its success has inspired other crypto gaming startups to find success in Vietnam.

Global Crypto Adoption Index

The "2022 Chainanalysis Global Crypto Adoption Index" ranks countries based on grassroot adoption. In contrast to ranking based simply on transaction volumes, grassroot adoption reflects institutional activity as well as highlights the countries "where individual, non-professional investors are embracing digital assets the most" – Chainanalysis.

The Global Crypto Adoption Index is made up of five sub-indexes which are based on countries' usage of different types of cryptocurrency services. Each country is ranked according to these five metrics and the geometric mean of these rankings is taken to give each country a final score.

The closer the final score is to 1, the higher the rank. The sub-indexes are calculated using web traffic data to estimate countries' cryptocurrency transaction volumes. These sub-indexes measure on-chain value received at centralized exchanges, on-chain retail value received at centralized exchanges, peer-to-peer exchange trade volume, wallet user share, and offline cryptocurrency payments per capita.

The Sub-indices

The sub-indices that make up the Global Crypto Adoption Index are:

• On-chain cryptocurrency value received at centralized exchanges, weighted by purchasing power parity (PPP) per capita:

  This sub-index ranks countries by total cryptocurrency activity on centralized services and weights the rankings based on the wealth of the average person and value of money in the country.

• On-chain retail value received at centralized exchanges, weighted by PPP per capita:

  This metric measures the activity of individual, non-professional cryptocurrency users at centralized services, based on the amount of cryptocurrency they are transacting compared to the wealth of the average person.

• Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and the number of internet users:

  These sub-index ranks countries by their P2P trade volume and weights it based on the country's PPP per capita and number of internet users, to highlight countries where more residents are putting a larger share of their wealth into P2P cryptocurrency transactions.

• Wallet user share:

  This sub-index ranks countries based on the estimated number of cryptocurrency wallet users relative to the country's internet population.

• Offline cryptocurrency payments per capita:

  This sub-index measures the estimated number of cryptocurrency payments made offline per person in each country. It is intended to highlight countries where cryptocurrency is being used for everyday transactions.

Sources

• Chainanalysis blogpost