Despite the ongoing crypto bear market, crypto adoption is still going strong, according to a new report by blockchain analysis firm Chainalysis. The 2022 report shows that the global adoption of crypto is in fact better than the pre-bull market level, which includes the first quarter of 2021. The crypto industry is maturing as investors remain resilient, in Chainanalysis’ assessment.
However, the crypto and Non-Fungible Token (NFT) hype from the second half of 2021 remains unmatched. Both Bitcoin (BTC) and Ether (ETH) hit all-time highs and NFT prices skyrocketed during that period.
“The Chainalysis 2022 Geography of Cryptocurrency Report,” was published on 20 October on the firm’s website. Supposedly describing everything “you need to know about crypto adoption around the world,” the report is a guide of sorts on crypto adoption and usage worldwide. It is the third installment of its kind.
The report is part of the Global Crypto Adoption Index by Chainalysis, which tracks how countries are adopting crypto or investing in digital assets. The current study feeds into the Singapore-based firm’s growing literature on crypto adoption.
The report found that 18 of the 20 countries where crypto adoption was at its highest belonged to the low- to middle-income categories. In such countries, crypto was used for remittance payments as it helps protect savings against high inflation.
Spearheading the adoption were Latin American countries like Brazil, Argentina, Colombia, Ecuador, and Mexico. The region, according to Chainalysis, is the seventh largest crypto market in 2022. Crypto users from the Latin American region received $562.0 billion in crypto between July 2021 to June 2022. This number represents a 40% growth over last year’s total.
The report further identified the three key use cases driving crypto adoption in these countries. Crypto seems to be popular for storing value, sending remittances, and seeking alpha.
Crypto adoption means different things for different countries based on their unique needs. For example, users in countries with weaker economies tend to rely on crypto for remittances, whereas those in more developed markets like Brazil treat crypto more as a speculative investment.
Decentralized Finance (DeFi) adoption, on the other hand, is most prevalent in North America and Western Europe, accounting for 37% and 31% of all crypto transaction volume.