Chainalysis Revealed Ukraine, Russia, And Venezuela As Top Crypto Adopters

Chanalysis, the crypto data firm, has recently published a new set of data. This data has revealed some rather unexpected surprises: Ukraine stands at the first place at the Global Crypto Adoption Index 2020. The two countries behind Ukraine stand as Russia and Venezuela, respectively.

The Metrics Of The Index

This Index focuses in on three on-chain metrics, in particular. First is the on-chain crypto transactions, which are then weighted by purchasing power per capita (PPP). Second is the total value of on-chain retail transfers, again weighted by PPP. Lastly, the number of on-chain crypto deposits are measured, weighted by the number of internet users doing so.

Alongside this, the Index further factors in the overall trade volumes made within Peer-to-Peer (P2P) crypto exchanges, which are weighted by both the PPP and the number of internet users.

Atypical Means Of Measurements

The report highlighted the various uneven levels of development when it comes to various nations’ crypto sectors. Interestingly enough, the per capita weighting has ranked China poorly in both on-chain deposit and P2P trade numbers. This comes as a result of the country’s very large population. This leads to China, while dominating the on-chain rankings in both total and retail value, having only been recorded at 4th place as a result.

This has also led to Kenya and Nigeria, who only fall in the top ten rankings by other metrics, taking their places within the top five of this Index, by contrast.

Potentially Skewing Results Towards Developing Countries

It should be noted, however, that this emphasis on the P2P volumes, in particular, threatens to overlook the establishment of various local regulated exchanges. This, in turn, could serve as an indicator of crypto adoption and could skew the results in developing countries’ favor. Simply put, these developing countries simply don’t have as robust as the financial sector as developed ones. This skew could contribute as to why the US is ranked below Kenya, even if it was outperforming the African nation in three of the four categories.

Chainalysis had highlighted Venezuela as a key example when it comes to the forces driving the adoption of cryptocurrencies in emerging countries. The firm highlighted the use of cryptocurrency amongst ordinary Venezuelans as a way to try and counteract the economic instability of the nation.

The firm highlighted out the Venezuelan citizens make greater use of cryptocurrencies when the native fiat of the country is losing its value to inflation. This suggests, according to Chainalysis, that Venezuelans turn to cryptocurrency as a means to hedge against a spiraling fiat currency.