Bitcoin has lost over half its value since the beginning of the year and its $68,000 high of November 2021 looks a distant memory. But in six countries, more than a third of the adult population continues to buy or sell cryptocurrencies at least once a month, says a report by global research firm Morning Consult (pdf), published July 7.
Nigeria and Turkey, each with more than 50% monthly active adult crypto traders, top the list of 40 countries surveyed. South Africa, Russia, and India are in the top ten.
The study is based on surveys with representative samples of crypto users in each country.
Some of the world’s more developed countries are on the low-adoption end of the scale with the UK, Germany, France, Japan, and China having just about 10% of their adults as active crypto traders.
What drives crypto interest?
Nigeria, Pakistan, and India are in the top 6 of the world’s most populous countries and will each have more people in 2050, per the UN’s latest projections. As such, user behavior in each country gives clues for how crypto adoption could develop in the future and will each have substantially higher populations.
But the similarities between countries with high crypto adoption today are more monetary than demographic. Except the United Arab Emirates, most countries in the top 10 for crypto trading have per capita incomes below $30,000 (in purchasing power parity terms), which puts them in the lower-income spectrum.
The report also notes that seven of the top 10 countries have initiated controls on foreign exchange transactions. The most striking examples here are Turkey and Argentina, two countries where inflation has shot up recently. In these countries, traders have been using crypto as a hedge against inflation until the recent crypto winter.
As in the US where 16% of adults trade crypto monthly, crypto holders around the world are in it mainly for the money they hope to make from it, not as means of making payments. For critics, this mindset continues to be an argument for why the crypto bubble is already bursting in some places, from Miami to El Salvador. Even in Africa, where transaction volumes grew 1,200% between July 2020 and 2021, adoption could be impacted negatively. Governments are floating central bank digital currencies to dissuade citizens from using and holding crypto.
That said, policymakers and innovators can learn a lot about the financial services ecosystem by keeping tabs with what motivates crypto users, the Morning Consult report says. Not only do crypto owners use more alternative platforms like non-bank apps, they are also more likely to send remittances and take payday loans. The insight could be especially useful for fintech designers in Africa, where digital technology is increasingly being relied on to overcome historic obstacles to access to financial services.