Cryptocurrency adoption slowed considerably since the onset of the bear market this year but still remains above levels seen before 2021, according to a new study by blockchain analysis firm Chainalysis.
Based on Chainalysis' global index score, crypto adoption slowed in the first two quarters of 2022 compared with the highs of the second and fourth quarters of 2021. Adoption remained higher, however, than the pre-bull market levels up to and including the first quarter of 2021.
Chainalysis' "2022 Geography of Cryptocurrency" report also found that 18 of the 20 countries where crypto adoption was at its highest were low- to middle-income countries, where cryptocurrency is used for sending remittances and protecting savings against high inflation.
By contrast, decentralized finance (DeFi) adoption is most prevalent in North America and Western Europe, where it accounted for 37% and 31%, respectively, of all crypto transaction volume.
This points to a trend where bitcoin is used as a primary entry point into crypto with people in low- and middle-income countries relying on it for basic day-to-day finances. Meanwhile, in more developed economies, DeFi is gathering speed both as a means of more sophisticated financial transacting and as an investment opportunity.
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