Chainalysis releases Global Crypto Geography Report, North American market shrinks, India becomes the world’s number one

Chainalysis Unveils Global Crypto Geography Report; North American Market Declines, While India Emerges as World's Top Market

Source: Chainalysis

Recently, Chainalysis released the 4th edition of the “Global Cryptogeography Report”. By combining on-chain information with real-world data, the report analyzes the penetration rate, per capita consumption, and service preferences of the crypto field in different regions. The report also calculates the global crypto adoption rate rankings for 2023, based on the total amount of crypto received by centralized exchanges, retail transactions, P2P transactions, and Defi transactions, weighted by per capita purchasing power index.

In the top 20 countries with the highest crypto adoption rates, the Central and South Asia and Oceania (CSAO) region dominates the index rankings. Six out of the top ten countries are located in this region. The list reveals that the highest crypto adoption rates are not found in developed countries, but rather in underdeveloped countries. The top 10 countries with the highest crypto adoption rates are India, Nigeria, Vietnam, United States, Ukraine, Philippines, Indonesia, Pakistan, Brazil, and Thailand. Within the Asian region, underdeveloped countries show a greater inclination for significant investments in the crypto field.

Overall, from a global perspective, the crypto adoption rate at the grassroots level is declining. The report summarizes the index scores for all 155 countries from the third quarter of 2020 to the present. Despite the recovery since the slump at the end of 2022, the grassroots adoption rate has not reached its historical peak and remains at a historical low.

Nevertheless, North America remains the largest market in this report. During the period from July 2022 to June 2023, the total value of on-chain transactions reached approximately 1.2 trillion USD, accounting for 24.4% of global transaction activities during the same period. Similarly, on-chain data reflects a decline in crypto activity in the North American region over the past year, which is attributed to negative events such as the collapse of FTX in November 2022, followed by the successive collapse of crypto-friendly banks, the anchoring deviation of USDC, and the continuous withdrawal of institutional investors. Stablecoins also exhibit the same trend, with a relative decrease in stablecoin usage compared to other digital assets in the North American region starting from around February 2023. From the following month until June 2023, the proportion of stablecoins in on-chain transaction volume in North America decreased from 70.3% to 48.8%.

In the face of frequent regulatory pressures this year, the regulatory advantage of the North American market has been lost, and funds have gradually flowed out of compliant exchanges. Stablecoin services highlight this point. Since the spring of 2023, a majority of stablecoins flowing into the top 50 cryptocurrency platforms have shifted from licensed U.S. exchanges to unlicensed U.S. exchanges, which is contrary to the trend seen at the end of 2022 and the beginning of 2023. As of June, 54.6% of stablecoins flowing into the top 50 exchanges were directed to unlicensed U.S. exchanges.

In the Latin American market, cryptocurrencies have become an important part of daily life in many countries due to their resistance to inflation and real-time trading. However, Latin America is vast and diverse, so there are variations in development between regions. Venezuela and Argentina primarily use cryptocurrencies to combat inflation, Mexico focuses on remittances as the mainstream application, and Brazil targets institutional investors. Centralized exchanges dominate this market, with Venezuela, for example, having 92.5% of cryptocurrency activity conducted through such services.

The report also provides detailed descriptions of Europe, East Asia, and Africa. As the report is only available in English, to facilitate the dissemination of industry views in the Chinese community, Tuo Luo Finance has translated the report into Chinese. The copyright of the report still belongs to Chainalysis, and the translation is for the purpose of exchanging viewpoints only. The report is not to be used for other commercial purposes.

Original report link:

https://go.chainalysis.com/geography-of-cryptocurrency-2023.html

Below are some excerpts from the translated report:

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