The more people get into crypto, the better. But how quickly are they adopting this new technology? The answer may surprise you.
Money makes the world go ‘round – but only if people are using it.
Look at what’s happened to the Iranian rial if you don’t believe us. Businesses fled the country following the 1979 Islamic Revolution and the Iran-Iraq War; the rial has fallen so far in value since then, that it’s been replaced by the toman, which everyone uses now even though the rial is still Iran’s “official” currency.
🔴 #Iran changes national currency from ‘rial’ to ‘toman’
Iranian parliament approved a bill to change the official currency to ‘toman’ which equals 10,000 rials. pic.twitter.com/zuSfI6nDst
— Today Headlines | خبرهای روز (@Iran) May 5, 2020
Let’s hope the same thing doesn’t happen to cryptocurrency.
We need more people using crypto, not fewer. However, how quickly are people adopting all the digital coins out there on the market, be it Bitcoin, Ethereum or any of the alt-coins available at crypto betting sites? And how do we measure this, so we can project where the market may be headed?
The Global Village
Fortunately for us, the people at Chainalysis are on the case.
They released their fourth annual Global Crypto Adoption Index last September, focusing specifically on grassroots adoption – as opposed to sheer transaction volume per nation. This helps the Index avoid the obvious issues of population size and VPN usage.
In short, crypto adoption is going quite slowly right now – or at least it was in the second quarter of 2023, which is as far as the latest Index goes.
There’s been some recovery since FTX went bankrupt in November 2022, but adoption levels are still as low as they were during the first year of the pandemic.
Having said that, there are parts of the world where crypto is on the upswing.
India is easily the No. 1 country on the Index, sweeping the board in nearly every category, including Centralized Service Value Received and DeFi Value Received. Nigeria is second overall, leading the world in P2P exchange trade volume; Vietnam is third overall on the Index.
What About the United States?
Have no fear: crypto is still being embraced stateside.
The U.S. ranks fourth on the Index, and that’s despite coming in at No. 12 for P2P exchange volume – which we hope is a good sign that people are choosing regulated crypto exchanges over peer-to-peer.
The U.S. is also the only country in the Top 10 that isn’t an emerging economy.
You’d expect people from developing countries like India, where the rupee is weak, to be more invested in cryptocurrency. There’s much less concern about the U.S. dollar, but interest in crypto remains strong in the Land of the Free.
The other leading economies in the Top 20 are China (No. 11), the United Kingdom (No. 14), Japan (No. 18) and Canada (No. 19), although crypto adoption can best be described as lukewarm in these countries. It’s the places like India and Nigeria in the “lower middle income” bracket that are quickest to jump on the crypto train. And they happen to make up about 40% of the world’s population.
What About ETFs?
Yes, the recent SEC approval of “spot” Bitcoin ETFs in the United States has indeed drawn more people into the crypto market – and we could see even more if and when spot Ethereum ETFs are given the green light.
Last month’s Security.org survey of over 1,500 Americans found 40% of respondents owning crypto, up from 30% last year. That number is likely to keep going up.
According to this survey, 21% of non-crypto owners said they were more likely to invest now that Bitcoin ETFs are a thing. Security.org says that’s congruent to an estimated 29 million Americans, in addition to as many as 93 million who have entered the market since 2023.
Why Does It Matter?
We’ve all become inured to the idea that popularity is the most important measure of value – that’s why it’s mostly the top performers on the Billboard charts who keep winning all these Grammy Awards and not the critically acclaimed artists.
However, when it comes to money, you don’t want your currency to be the one playing in half-empty halls.
Even if you ignore the specific benefits of crypto for a moment, you know that economies need money to circulate if business is going to take place. The more people use crypto, especially if they actually use it for purchases or crypto betting, instead of just holding onto it, the more business there will be.
Then you have those benefits you get with crypto:
- Faster transactions.
- Smaller fees.
- The creation of entirely new business models.
For now, most of these benefits are being reaped by banks and other financial institutions, as well as savvy investors, but over time, as more retail stores and other businesses accept cryptocurrency as payment, business will keep going up – even in countries like Iran where the “fiat” currency is struggling.
