The 2023 Global Crypto Adoption Index
Central & Southern Asia Leading the Way in Grassroots Crypto Adoption
We’re excited to unveil the fourth annual Chainalysis Global Crypto Adoption Index. The goal of the index is simple: We combine on-chain data and real-world data to measure which countries are leading the world in grassroots crypto adoption. Grassroots crypto adoption isn’t about which countries have the highest raw transaction volumes — anyone could probably guess that the biggest, wealthiest countries are far ahead there. Instead, we want to highlight the countries where average, everyday people are embracing crypto the most. To do that, we’ve designed the Global Crypto Adoption Index to identify countries where the most people are putting the greatest share of their wealth into cryptocurrency. We’ll explain the full methodology below, then provide the top 20 countries on our index, along with a few key takeaways.
Our crypto adoption index methodology
The Global Crypto Adoption Index is made up of five sub-indexes. Each of those sub-indexes is based on countries’ usage of different types of cryptocurrency services. We rank all 155 countries for which we have sufficient data on each sub-index, weight the rankings by characteristics like population size and purchasing power, take the geometric mean of each country’s ranking in all five, 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.
In order to calculate our sub-indexes, we estimate countries’ transaction volumes for different types of cryptocurrency services and protocols based on the web traffic patterns of those services’ and protocols’ websites. We acknowledge that web traffic data isn’t perfect. Some crypto users are almost certainly employing VPNs and other tools that mask online activity. But given that our index takes into account hundreds of millions of transactions and 13 billion web visits, we’re confident that any misattributed transaction volume due to VPNs is too small to compromise the data as a whole. We also vet our index with local crypto experts and operators around the world, giving us more confidence in this methodology.
Below is a description of each sub-index, how it’s calculated, and why we believe it’s valuable for measuring grassroots crypto adoption.
On-chain cryptocurrency value received at centralized exchanges, weighted by purchasing power parity (PPP) per capita The goal of this sub-index is to rank each country by total cryptocurrency activity occurring on centralized crypto exchanges, and weight the rankings to favor countries where that amount is more significant based on the wealth of the average person in that country. We calculate this by estimating the total cryptocurrency received on-chain by users of centralized services in each country, and weighting that value based on PPP per capita, which is a measure of the country’s wealth per resident. The higher the ratio of on-chain value received to PPP per capita, the higher the ranking. In other words, if two countries received equal amounts of cryptocurrency at centralized services, the country with lower PPP per capita would rank ahead.
On-chain retail value received at centralized exchanges, weighted by PPP per capita
The goal of this metric is to measure the activity of non-professional, individual cryptocurrency users at centralized services, based on how much cryptocurrency they’re transacting compared to the wealth of the average person. We do this by measuring the amount of cryptocurrency received at centralized services by users in each country, similar to the above, but only counting value received in retail-sized transactions, which we designate as transactions under $10,000 USD worth of cryptocurrency. We then rank each country according to this metric but weight it to favor countries with a lower PPP per capita.
Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and number of internet users
P2P trade volume makes up a significant percentage of all cryptocurrency activity in emerging markets. For this sub-index, we rank countries by their P2P trade volume and weight it to favor countries with lower PPP per capita and fewer internet users, the goal being to highlight countries where more residents are putting a larger share of their overall wealth into P2P cryptocurrency transactions.
On-chain cryptocurrency value received from DeFi protocols, weighted by PPP per capita
DeFi (decentralized finance) is the cutting edge of cryptocurrency. Given the sector’s importance to innovation in crypto, we want our adoption index to highlight countries where users are conducting a disproportionately high share of their financial activity using DeFi protocols. For this sub-index, we rank countries by their DeFi transaction volume, and weight the rankings to favor countries with lower PPP per capita.
On-chain retail value received from DeFi protocols, weighted by PPP per capita
We want our index to highlight the DeFi activity of non-professional, individual cryptocurrency users, just as we do for centralized services. So, this sub-index ranks each country by DeFi transaction volume carried out in retail-sized transfers, weighted to favor countries with lower PPP per capita.
Source - Chainalysis
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