Emerging Markets Lead Global Crypto Adoption in Bear Market, Chainalysis Says

The blockchain analytics firm's 2022 Global Crypto Adoption Index also shows China remains active despite a ban on crypto trading.

AccessTimeIconSep 14, 2022 at 2:13 p.m. UTC
Updated May 11, 2023 at 3:44 p.m. UTC

Emerging markets, with Vietnam at the lead, drove global crypto adoption in the last year, according to blockchain analytics firm Chainalysis’ 2022 Global Crypto Adoption Index.

Global crypto adoption rates have slowed during the bear market this year, but the slump didn't wipe out the growth in adoption during bull markets, Chainalysis said in the report accompanying this year's index. Crypto use globally remains higher than pre-bull market levels with emerging markets leading the way, according to the report. In its 2021 report, Chainalysis reported a 880% jump in adoption levels year over year.

Vietnam tops the index for the second year with the Philippines a close second. Of the 20 countries leading the list, 10 (including the top two) are lower-middle-income countries including Ukraine, India, Pakistan and Nigeria while eight are upper-middle-income countries such as Brazil and Thailand.

"One reason for this could be the value that users in emerging markets get from cryptocurrency. These countries dominate the adoption index, in large part because cryptocurrency provides unique, tangible benefits to people living in unstable economic conditions," the report said.

China, where crypto trading and mining is prohibited, grabbed the number 10 spot on the index up three places from last year. Chainalysis' data suggests that the country's crypto ban has either been "ineffective" or "loosely enforced," according to the report.

The blockchain analytics firm uses five indexes that look at cryptocurrency moving through centralized platforms like crypto exchanges, peer-to-peer transactions and decentralized finance (DeFi) applications to determine which countries make it onto the list. This year's methodology was updated to include two metrics that look at DeFi transaction volume.

"We did this for two reasons: First, as we explain above, to highlight countries leading the way in DeFi given its importance to the overall cryptocurrency ecosystem. Second, we wanted to address the issue of DeFi-driven inflation of transaction volume," the report said.

Chainalysis also relies on web traffic data, which could prove troublesome for determining location given crypto users' proclivity for virtual private networks (VPN), which mask geographical data. Even so, Chainalysis said usage rates are not likely high enough to "meaningfully skew" its findings.

The Global Crypto Adoption Index is part of Chainalysis' forthcoming Geography of Cryptocurrency report for this year.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.