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Lower-middle income countries, such as India and Nigeria, are leading the way in crypto adoption, according to a report by Chainalysis. While the overall usage of crypto has declined globally, these up-and-coming economies have embraced digital currencies, showing promising prospects for the future of crypto. Despite North America dominating the market in terms of volume, there has been a noticeable drop in institutional transaction volume and a decline in the share of stablecoin. Central and Southern Asia, Central, Northern, and Western Europe, and North America are the top originators of transaction value received. With lower-middle income countries at the forefront of adoption, it appears that crypto will play a significant role in shaping their future.

Lower-middle income countries lead in crypto adoption

Crypto adoption has been on the rise worldwide, but lower-middle income (LMI) countries have emerged as the leaders in embracing cryptocurrencies. According to a recent report by Chainalysis, India is at the forefront of crypto adoption, followed closely by Nigeria and Vietnam. These countries, which are characterized by their dynamic and growing economies, have become hotspots for crypto enthusiasts. Despite an overall decline in crypto adoption globally, LMI countries have bucked the trend, showcasing their potential for a promising future in the crypto space.

India leads in crypto adoption

Chainalysis’s report identifies India as the leading country in terms of crypto adoption. This comes as no surprise, given India’s large population, rapidly growing economy, and tech-savvy workforce. The report highlights that the adoption of cryptocurrencies in India has been steadily increasing since the second quarter of 2022 when global usage started to decline. With a population of over 1.3 billion people, India’s embrace of crypto indicates its potential as a major player in the future of cryptocurrencies.

Nigeria and Vietnam follow India in crypto adoption

Following closely behind India in crypto adoption are Nigeria and Vietnam. These countries have seen a surge in crypto adoption, driven by factors such as economic growth and a young, tech-savvy population. Nigeria, in particular, stands out as a leader in transaction volume, surpassing other sub-Saharan countries. The report also highlights the potential of Vietnam, showing its rapid growth in crypto adoption, second only to India. These countries’ embrace of cryptocurrencies demonstrates the widespread appeal and potential of digital currencies in emerging economies.

North America dominates in value received by cryptocurrency exchanges

While lower-middle income countries lead in crypto adoption, North America dominates in terms of value received by cryptocurrency exchanges. The United States, in particular, accounts for nearly a quarter of all value received by exchanges globally. This dominance can be attributed to various factors, including a more developed financial infrastructure and a higher level of investor participation in the crypto market. Despite the dominance of North America in terms of value, the report reveals a decline in institutional transaction volume in the region, suggesting a shifting landscape in the crypto market.

Calculation of adoption based on web traffic data

To determine the level of crypto adoption, Chainalysis used web traffic data from billions of web visits. The data was then analyzed to track five categories of activity related to cryptocurrencies. The analysis also considered purchasing power parity per capita to weigh the data accurately. This approach helps determine which countries have embraced cryptocurrencies the most, emphasizing the adoption by everyday people rather than just transaction volumes. By using web traffic data, Chainalysis provides a comprehensive view of crypto adoption globally.

Downward trend in crypto adoption worldwide, except in lower-middle income countries

While crypto adoption has faced a downward trend globally, lower-middle income countries have defied this trend. The report highlights that LMI countries, such as India, Nigeria, and Ukraine, have been the leading adopters of cryptocurrencies since the second quarter of 2022. This trend offers a glimmer of hope for the future of cryptocurrencies, as LMI countries are often characterized by their growing industries and populations. The embrace of crypto in these countries indicates the potential for widespread adoption and integration into their economies.

Promising future for crypto in lower-middle income countries

The report suggests that the future of crypto looks promising in lower-middle income countries. Their dynamic and growing industries, coupled with a population eager to embrace new technologies, create a fertile ground for cryptocurrencies to thrive. As these countries continue to adopt and integrate cryptocurrencies into their daily lives, there is a strong likelihood of increased innovation and investment in the crypto space. The growth in adoption seen in LMI countries signals a potential shift in the crypto landscape, with emerging economies taking the lead.

Top originators of transaction value received

The report reveals that Central and Southern Asia and Oceania, Central, Northern, and Western Europe, and North America are the top originators of transaction value received. These regions have shown significant involvement in the crypto market, contributing to the overall global adoption of cryptocurrencies. Central, Northern, and Western Europe, in particular, stand out as notable contributors to the transaction value received, with the United Kingdom leading the way. The diversity of countries driving crypto adoption highlights the global nature of the crypto market.

Decline in institutional transaction volume and share of stablecoin

Despite North America’s dominance in value received by cryptocurrency exchanges, there has been a decline in institutional transaction volume in the region. The report suggests that this decline may indicate a shifting landscape in the crypto market, with institutions potentially exploring other avenues for investment. Additionally, there has been a significant decrease in the share of stablecoin in transaction volume. This may reflect a shift in investor preferences or a move towards other types of cryptocurrencies with potentially higher returns.

Conclusion

The Chainalysis report sheds light on the current state of crypto adoption and provides valuable insights into the global landscape. While lower-middle income countries lead in crypto adoption, North America dominates in terms of value received by exchanges. The decline in institutional transaction volume and the share of stablecoins signal a changing market dynamic. However, the report emphasizes the promising future of crypto in lower-middle income countries, where adoption continues to grow. As the crypto market evolves, these countries are poised to play a significant role in shaping the future of cryptocurrencies.