Global Currency Adoption Index Jumps 881 Percent, Nigeria Ranked Sixth

Nigeria ranks sixth in the global cryptocurrency adoption index to become the second African country in the top 10 list, according to the 2021 Global Crypto Adoption Index by blockchain data platform Chainalysis.

Cryptocurrency adoption has skyrocketed in the last twelve months, and the variation in the countries contributing to that show that cryptocurrency is a truly global phenomenon. The worldwide adoption of cryptocurrency has grown by over 2,300 percent since the third quarter of 2019 and over 881 percent in the last year.

“Our research suggests that reasons for this increased adoption differ around the world — in emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions, while adoption in North America, Western Europe, and Eastern Asia over the last year has been powered largely by institutional investors,” the report said.

The blockchain data analytics firm explained that its Global Crypto Adoption Index is made up of three metrics. The first is “on-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita.” The second is “on-chain retail value transferred, weighted by PPP per capita,” and the third is “peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and the number of internet users.”

Chainalysis noted that the biggest change to its new crypto adoption index methodology from last year’s index “was the elimination of a fourth metric,” which was the “Number of deposits by country weighted by [the] number of internet users.

“We rank all 154 countries according to each of those three metrics, take the geometric mean of each country’s ranking in all three, and then normalize that final number on a scale of 0 to 1 to give every country a score that determines the overall rankings. The closer the country’s final score is to 1, the higher the rank.”

According to the 2021 Global Crypto Adoption Index, Vietnam ranks first, followed by India, Pakistan, Ukraine, Kenya, Nigeria, Venezuela, and the U.S.

The top 20 countries in Chainalysis’ 2021 Global Crypto Adoption Index and their rankings in the component metrics that make up the overall ranking. Source: Chainalysis

China and the U.S. dipped in the new overall ranking. Last year, China ranked fourth overall while the U.S. ranked sixth. This year, the U.S. ranks eighth while China ranks 13th. “The biggest reason both countries dropped is that their rankings in P2P trade volume weighted for internet-using population declined dramatically — China fell from 53rd in this component to 155th, while the U.S. fell from 16th to 109th,” Chainalysis detailed.

“Growing transaction volume for centralized services and the explosive growth of DeFi [decentralized finance] are driving cryptocurrency usage in the developed world and in countries that already had substantial adoption, while P2P platforms are driving new adoption in emerging markets,” the firm explained.

Chainalysis revealed that “data shows that growing transaction volume for centralized services and the explosive growth of DeFi are driving cryptocurrency usage in the developed world and in countries that already had substantial adoption, while P2P platforms are driving new adoption in emerging markets.”