Chainalysis Report: Australia Falls Short of Top Crypto Country Ranking

American blockchain analytics firm Chainalysis has just released its annual report about the state of crypto. The report titled, “The 2023 Geography of Cryptocurrency Report – Everything you need to know about regional trends in crypto adoption,” looks at trends in regional markets as well as where adoption is most prevalent.

Top 20 Crypto Adopters

The Global Crypto Adoption Index consists of five sub-indexes that gauge countries’ utilisation of various cryptocurrency services.

Countries are ranked based on data from 155 nations, with rankings weighted by factors like population and purchasing power. The rankings are then averaged using the geometric mean and normalised on a 0 to 1 scale to determine overall placement.

The top five countries with the highest adoption of crypto are India, Nigeria, Vietnam, the United States and Ukraine. China ranks in spot 11, the United Kingdom at 14, Japan at 18, and Australia at 41, well above New Zealand, which ranks 90 out of 155. The CSAO (Central & Southern Asia and Oceania) region makes up less than 20% of global crypto value. 

Countries in the Low-to-Middle Income (LMI) category dominate the top spots in the Global Crypto Adoption Index. LMI nations are the only ones that have maintained grassroots crypto adoption levels above those of Q3 2020.

These countries, representing 40% of the global population, are rapidly developing with expanding industries and demographics. The authors suggest, the ascendancy from low-income status, coupled with the rising institutional crypto adoption in high-income countries, suggests a promising dual approach to crypto adoption in the future.

According to Chainalysis, this blend of grassroots and institutional trends highlights the versatile potential of digital assets in meeting diverse needs.

Bitcoin’s dominance

Bitcoin’s (BTC) dominance is most evident in Sub-Saharan Africa, where it serves as a significant alternative store of value due to the region’s struggles with inflation and debt. Ghana, plagued by 29.8% inflation in June 2022, saw many of its citizens turning to Bitcoin.

Similar trends are observed in Nigeria, Kenya, and South Africa. These countries have experienced grassroots cryptocurrency adoption, likely driven by their economic challenges. However, some are now gravitating towards stablecoins, which are less volatile than Bitcoin.

Moyo Sodipo, CPO of Nigeria-based crypto exchange Busha, observed a shift in interest from Bitcoin to stablecoins, especially after Bitcoin’s price decline. Despite market fluctuations, there’s a consistent effort to find hedges against currency devaluation and economic downturns post-COVID, he stated.

Highest Growth Region

Saudi Arabia experienced the highest growth in crypto transactions over the past year, with a 12.0% increase in transaction volume. It’s one of only six countries to report any growth in this sector during the studied period, the authors remark.

Abdulmajed Alhamzah, the Country General Manager for Saudi Arabia at the crypto exchange Rain, highlighted that retail investors, who already invest in real estate and stocks, are the major demographic exploring crypto. He stated that they view cryptocurrency as a promising asset, anticipating its growth due to the internet’s prior transformative impact.

There’s also an increase in institutional interest in crypto in the region. Despite the Saudi government’s earlier reservations about Bitcoin and other cryptocurrencies, the nation’s crypto market has grown. In September 2022, the Saudi Central Bank appointed Mohsen Al Zahrani as the “Crypto Chief” to spearhead digital transformation.

Saudi Arabia is also showing interest in Web3 and blockchain gaming projects, like a collaboration with The Sandbox to delve into the metaverse. Abdulmajed is optimistic, citing efforts by regional regulators to create a solid regulatory framework that promotes innovation while protecting consumers.