2024 Global Cryptocurrency Adoption Index

This post is an excerpt from the 2024 Cryptocurrency Geography Report. Download your copy now.

We are pleased to share our 5th Annual Chainaracy Global Crypto Adoption Index. The annual report examines both on-chain and off-chain data to determine which countries are leading the world in grassroots cryptocurrency adoption. Our research explores why people in countries around the world are embracing cryptocurrencies, focusing on countries where unique cryptocurrency use cases are gaining ground.

If you want to know more about the following, keep reading.

Our Global Crypto Adoption Index Methodology

The Global Crypto Adoption Index consists of four sub-indices, each based on each country's usage of different types of cryptocurrency services. We rank all 151 countries for which we have sufficient data for each sub-index, weight the rankings by characteristics such as population size and purchasing power, and then take the geometric mean of each country's ranking across all four to produce the final number. Normalize by scale. We give every country a score from 0 to 1 to determine its overall ranking. The closer a country's final score is to 1, the higher its rank.

To calculate the sub-index, we estimate the trading volume for each country based on the web traffic patterns of websites for different types of cryptocurrency services and protocols. We acknowledge that web traffic data is incomplete as some cryptocurrency users may use VPNs and other similar tools to hide their true physical location. Masu. However, given the size of our dataset, given that our index takes into account hundreds of millions of cryptocurrency transactions and over 13 billion web visits, the misattribution of transaction volume by VPNs is likely to be small. There may be. We also compare our findings with insights from local cryptocurrency experts and operators around the world, increasing our confidence in this methodology.

Below we describe the sub-indexes and how they are calculated, as well as the methodology improvements from last year.

Sub-index category 1: On-chain cryptocurrency value received by centralized services, weighted by GDP per capita on a PPP-adjusted basis

We include this sub-index to rank countries by the total amount of cryptocurrencies received in centralized services, giving priority to countries where that amount is more significant compared to the income of the average person in that country. Add weight to rankings. To calculate this, we estimate the total amount received on-chain by users of centralized services in each country and measure it by GDP per capita on a PPP-adjusted basis, which measures the income per resident of that country. weight. The higher the ratio of value received on-chain to GDP per capita on a PPP-adjusted basis, the higher the ranking. In other words, if two countries receive the same amount of cryptocurrency in centralized services, the country with the lower weighted GDP per capita on a PPP-adjusted basis will rank higher.

Sub-Index Category 2: On-chain retail cryptocurrency value received by centralized services, weighted by GDP per capita on a PPP-adjusted basis

We also estimate the activity of non-professional individual crypto users in centralized services based on the value of the crypto they trade relative to the purchasing power of the average person. This is done by estimating the amount of virtual currency received in centralized services by users in each country, similar to sub-index category 1, but with a retail scale designated as transactions for less than $10,000 worth of virtual currency. Only the amount received in the transaction is counted. We then rank countries according to this indicator, but weight them to favor countries with lower GDP per capita on a PPP-adjusted basis.

Sub-Index Category 3: Value of on-chain cryptocurrencies received by DeFi protocols, weighted by GDP per capita on a PPP-adjusted basis

We rank countries by DeFi transaction volume and weight the ranking to favor countries with lower GDP per capita on a PPP-adjusted basis.

Sub-Index Category 4: On-chain retail cryptocurrency value received by DeFi protocols, weighted by GDP per capita on a PPP-adjusted basis

We rank countries by the volume of DeFi transactions executed in retail-scale transfers (also less than $10,000 worth of cryptocurrencies), favoring countries with lower GDP per capita on a PPP-adjusted basis. It is weighted.

Change in methodology

Methodology change 1: Measuring DeFi activity

The main changes in methodology this year concern how the value of cryptocurrencies received in decentralized protocols is measured. For DeFi services, we only included values ​​received from suspicious private wallets and excluded values ​​received from other known DeFi wallets. This new methodology ensures that the total amount received is not inflated by the intermediary steps required for a particular smart contract.

Here is an example of how DeFi transfers typically work.

1. The personal wallet initiates a swap on DeFi Protocol A, transferring Ether (ETH) from the personal wallet to DeFi Protocol A's router contract address.
2. ETH will be deposited from the router contract address to the Wrapped Ether (wETH) token contract address.
3. The Router contract address receives wETH.
4. A transfer occurs from the router to a decentralized exchange (DEX) pool contract.
5. A transfer occurs from the DEX pool contract to the router.
6. The final transfer from the router to your personal wallet takes place.

Based on the new methodology, the example above only counts the first transfer to determine the total value received by the DeFi protocol. This allows you to eliminate intermediate transfers between contracts belonging to the same service provider. This process reduced the estimate of value received, but it is now a more accurate estimate.

Methodology change 2: Exclusion of P2P exchange sub-index

For the past few years, we have included trading volumes of P2P cryptocurrency exchanges weighted by PPP per capita and number of internet users to calculate the overall global cryptocurrency adoption ranking. This year, we decided to exclude this sub-index due to the significant decrease in activity on P2P exchanges. The closure of LocalBitcoins.com, one of the largest and oldest P2P exchanges, last year contributed to this decline.

2024 Global Cryptocurrency Adoption Index Top 20

Central and South Asia and Oceania (CSAO) dominates the 2024 index, with seven of the top 20 countries located in the region. As detailed in the full report, CSAO has its own set of crypto markets, with high levels of activity across local crypto exchanges, merchant services, and DeFi.

Global cryptocurrency activity is on the rise

From the fourth quarter of 2023 to the first quarter of 2024, the total amount of global crypto activity increased significantly, reaching higher levels than in 2021 during the crypto bull market. This pattern can be seen in the graph below. This chart adds up all index scores for 151 countries for each quarter from Q3 2021 to Q2 2024 and re-indexes them again to calculate global adoption growth over time. By showing that the introduction index method is applied globally.

Last year, growth in cryptocurrency adoption was primarily driven by low- and middle-income countries. However, this year saw an increase in cryptocurrency activity in countries across all income brackets, before receding in high-income countries from early 2024 onwards.

The launch of a Bitcoin ETF in the US has led to an increase in total Bitcoin activity across all regions, with particularly strong year-on-year growth in institutional-scale transfers and regions with North America and high-income countries. did. Western Europe. On the contrary, stablecoin year-over-year growth rates have been higher for personal and professional remittances, with real-world use cases in low- and lower-middle-income countries in regions such as sub-Saharan Africa and Latin America. We support you. , especially.

Looking at year-over-year growth by service type, we see significant increases in DeFi activity in sub-Saharan Africa, Latin America, and Eastern Europe. This growth may have caused an increase in altcoin activity in these regions, as shown in the graph above.

To learn more about these trends, recent regulatory developments, and how countries around the world are using cryptocurrencies, read the full 2024 Cryptocurrency Geography Report.

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