Original author: Chainalysis Team
Original translation: TechFlow
See where your country ranks on the 2024 Chainalysis Global Crypto Adoption Index with this interactive map .
This article is excerpted from our 2024 Geography of Cryptocurrency Report .
We are excited to share the fifth annual Chainalysis Global Cryptocurrency Adoption Index. In each year’s report, we analyze on-chain and off-chain data to determine which countries are leading in grassroots cryptocurrency adoption. Our research highlights countries where unique cryptocurrency use cases are taking shape and explores why people around the world are choosing to embrace cryptocurrency.
Read on to learn more:
Methodology for our Global Crypto Adoption Index
The Global Cryptocurrency Adoption Index consists of four sub-indices, each based on countries use of different types of cryptocurrency services. We rank all 151 countries for which we have sufficient data on each sub-index. We weight the rankings based on characteristics such as population size and purchasing power, calculate the geometric mean of each countrys performance in the four sub-indices, and then normalize the final results to a range of 0 to 1, giving each country a score to determine its overall ranking. The closer a countrys final score is to 1, the higher its ranking.
To calculate our sub-indices, we estimate the volume of different types of cryptocurrency services and protocols in each country based on the web traffic patterns of the websites of these services and protocols. We acknowledge that web traffic data has certain limitations, as some crypto users may use tools such as VPNs to hide their true physical location. However, given that our index covers hundreds of millions of cryptocurrency transactions and over 13 billion web page visits, any misattributed volume due to VPNs is negligible in the face of such a large dataset. We also compare our findings with insights from local crypto experts and operators around the world, which strengthens our confidence in this methodology.
Below are descriptions of the sub-indices and how they are calculated, as well as improvements to our methodology since last year .
Sub-index Category 1: Value of on-chain cryptocurrencies received by centralized services, calculated by GDP per capita adjusted for purchasing power parity (PPP)
We introduced this sub-index to rank countries by the total value of cryptocurrency received on centralized services, and weighted the ranking to favor those countries where this amount is higher relative to average income. To calculate this, we estimate the total value received on-chain by users of centralized services in each country and weight it by GDP per capita adjusted for purchasing power parity (PPP), which reflects the income of each resident in the country. The higher the ratio of value received on-chain to GDP per capita adjusted for PPP, the higher the ranking. In other words, if two countries receive the same amount of cryptocurrency on centralized services, the country with the lower GDP per capita will be ranked higher.
Sub-index Category 2: On-chain retail cryptocurrency value received by centralized services, calculated by GDP per capita adjusted for purchasing power parity (PPP)
We also estimate the activity of non-professional individual cryptocurrency users on centralized services, based on the value of cryptocurrency they trade compared to the purchasing power of the average person. We do this by estimating the amount of cryptocurrency received by users on centralized services in each country, but only counting retail transactions worth less than $10,000. We then rank countries based on this metric, weighting the rankings to favor countries with lower GDP per capita (adjusted for purchasing power parity (PPP)).
Sub-index Category 3: On-chain cryptocurrency value received through decentralized finance (DeFi) protocols, calculated by GDP per capita adjusted for purchasing power parity (PPP)
We ranked countries based on their DeFi transaction volume and weighted the rankings to favor countries with lower GDP per capita (adjusted for purchasing power parity (PPP)).
Sub-index Category 4: On-chain retail cryptocurrency value received through decentralized finance (DeFi) protocols, calculated by GDP per capita adjusted for purchasing power parity (PPP)
We ranked countries based on their DeFi transaction volume in retail-scale transfers (again, less than $10,000 worth of cryptocurrency), and weighted the rankings to favor countries with lower GDP per capita (adjusted for purchasing power parity (PPP)).
Methodological changes
Methodology Change 1: Measuring Decentralized Finance (DeFi) Activity
The main change to the methodology this year is how we measure the value of cryptocurrencies received by decentralized protocols. For DeFi services, we only consider the value received from suspicious individual wallets and exclude the value received from other known DeFi wallets. This new methodology ensures that the total value received is not inflated by the intermediary steps required by certain smart contracts.
Here’s an example of how DeFi transfers typically work:
A personal wallet initiates an exchange in DeFi Protocol A, transferring Ether (ETH) from the personal wallet to the router contract address of DeFi Protocol A.
ETH is deposited from the router contract address into the wrapped ether (wETH) token contract.
The router contract receives wETH.
Transfers from the router contract to the decentralized exchange (DEX) pool contract.
Transfer funds from the DEX pool contract to the router contract.
Finally, transfer from the router contract back to the personal wallet.
According to our new methodology, we only count the first transfer in the above example to determine the total value received by DeFi protocols. In this way, we can eliminate intermediary transfers between contracts of the same service provider. This process has led to a reduction in our estimate of received value, but it is now more accurate.
Methodology Change 2: Excluding P2P Exchange Sub-Index
In previous years, we included P2P cryptocurrency trading volume, weighted by purchasing power parity (PPP) per capita and the number of internet users, to calculate the overall global cryptocurrency adoption ranking. This year, we decided to exclude this sub-index due to a significant decrease in activity on P2P exchanges. The closure of LocalBitcoins.com, one of the oldest P2P exchanges, last year contributed to this decline.
Top 20 Global Cryptocurrency Adoption Index 2024
Central and Southern Asia and Oceania (CSAO) dominates our 2024 Index, with seven countries from the region making the top 20. As we mention in the full report, CSAO has a unique set of crypto markets, with high levels of activity on local crypto exchanges, as well as strong activity in merchant services and decentralized finance (DeFi).
Global Crypto Activity Continues to Grow
Between Q4 2023 and Q1 2024, the total value of global crypto activity increased significantly, reaching levels higher than during the 2021 crypto bull run. We can observe this trend in the chart below, which aggregates the index scores for 151 countries for each quarter from Q3 2021 to Q2 2024 and re-indexes to show the growth of global adoption.
Last year, growth in cryptocurrency adoption was driven primarily by low- and middle-income countries . However, this year, cryptocurrency activity has increased in countries across all income brackets, but has fallen in high-income countries since early 2024.
When we look at year-over-year growth across different service types, we see that decentralized finance (DeFi) activity has increased significantly in Sub-Saharan Africa, Latin America, and Eastern Europe. As the chart above shows, this growth is likely driving increased altcoin activity in these regions.
When we look at year-over-year growth by service type, we see that decentralized finance (DeFi) activity has grown significantly in Sub-Saharan Africa, Latin America, and Eastern Europe. As shown in the chart above, this growth may have contributed to increased altcoin activity in these regions.
To learn more about these trends, recent regulatory developments, and how countries around the world are using cryptocurrencies, read the full 2024 Geography of Cryptocurrency report .
