Besides Vietnam, the remaining countries are India, Pakistan and Ukraine.
According to a report by crypto analytics firm Chainalysis, the popularity of cryptocurrencies among individual investors globally has been increasing rapidly in the past year. Based on factors such as peer-to-peer transaction volume and value received, Chainalysis says that the global popularity of cryptocurrencies has increased by 881% over the past 12 months.
The firm found that while countries with institutional markets are important, they want to highlight the countries with the largest percentage of retail investors in the cryptocurrency market. Not only that, they want to focus more on the purposes of using cryptocurrencies for trading and personal savings, rather than speculation and exchange.
With this criterion, at the top of Chainalysis's list are Vietnam, India, Pakistan and Ukraine.
“In emerging markets, many people are turning to cryptocurrencies as savings in the face of currency devaluation, sending and receiving remittances, and conducting business transactions.” Chainalysis said in its report. In addition, “cryptocurrency adoption in North America, Western Europe, and East Asia over the past year has also been supported by the majority of institutional investors.”
Interest in cryptocurrencies has skyrocketed since the outbreak of the pandemic, in part because significant gains have come from digital tokens like Bitcoin and Ether. The Bloomberg Galaxy Crypto Index has also surged 380% in the past year.
Chainalysis's Global Cryptocurrency Approval Index ranks 154 countries across key metrics, including peer-to-peer transaction volume and the DeFi approval index.
Both China and the US are now down compared to last year, mainly because of the decrease in peer-to-peer trading volume. Last year, China ranked 4th and the US 6th on the list. Now, the US ranks 8th and China drops to 13th.
Chainalysis also removed a factor it used to use in the past: the country's number of deposits in terms of internet users. However, the company found this metric skews their rankings for countries with a relatively large user base geared towards DeFi (decentralized finance) applications. For that, the company has created the DeFi Adoption index to include in the assessment in the coming weeks.
“Increasing transaction volumes with centralized services and explosive growth of DeFi are driving the use of cryptocurrencies in developed countries and those that have popularized them, while, P2P peer-to-peer platforms are driving popularity in emerging markets." Chainalysis said.
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