Year-to-date, the total crypto market cap shrunk by 53%, from 2.2 trillion to 1 trillion. Yet, the last two years saw a massively accelerated crypto adoption across all categories. Gemini’s global state of crypto report reveals many insights that long-term investors can take advantage of.
Gemini’s report is based on a series of surveys across 20 countries, covering 29,293 adult participants. Depending on the country, the sample size ranges between 1,200 and 2,300 respondents.
2021 as the Tipping Point for Global Crypto Adoption
In 2021, cryptocurrency market capitalization exploded by +241%, from $844 billion in January to $2.8 trillion in November. Although it is now apparent this growth largely poured from the Fed-induced liquidity bubble, the effect has long-term consequences.
Firstly, 41% of crypto owners bought their first digital assets in 2021. Of the new wave of crypto owners, over half hail from developing countries, Brazil (51%) and India (54%), alongside Hong Kong (51%). Moreover, Gemini’s survey identified a new category to look out for – crypto-curious.
While crypto-curious respondents don’t own cryptocurrencies, they expressed interest in doing so. Specifically, 41% of them globally. Interestingly, per country, the gender gap for crypto-curious is tipping on the female side.
The question is, what would tip the crypto-curious into actual digital asset ownership? The respondents overwhelmingly prioritized more educational resources (40%) as opposed to friends’ recommendations (22%).
In developing continents, the need for education was the most pronounced, at 51% in Latin America and at 56% in Africa. In the US, crypto-curious would flip through education at 42%, while Asia Pacific at 44%.
Crypto Ownership Breakdown
It has often been speculated about the type of country needed to nurture the greatest crypto adoption. Based on the Gemini report, this spectrum veers between three points:
- Developed nations tend to have least crypto ownership.
- Developing nations tend to have the most crypto ownership.
- Smaller, highly urbanized nations are trailing developing nations.
Case in point, while Singapore (30%) is a city-state, 87% of UAE (35%) population is urbanized. The same goes for Israel (28%), which is urbanized at 92%. This is predictable because a higher level of urbanization goes hand-in-hand with a higher level of education.
An additional driver for crypto adoption is disposable income, with Germany, UK, and France leading the way for high-income digital asset owners.
Inflation: Key Adoption Driver in Developing Nations
The main driver for crypto adoption in developing nations is inflation. Even before the Federal Reserve drastically increased the dollar supply in the last two years, many nations have struggled with hyperinflation. Following lockdown-disrupted supply chains, and the Fed’s $5 trillion pump, this was exacerbated.
In turn, because the dollar is the global reserve currency, countries had to buy more dollars, devaluing their own national currencies in the process. We have already seen this dynamic in energy-crippled Europe as the euro dropped under one dollar, the lowest in 20 years.
Now that the energy crisis engulfed Europe after sanctioning Russia, we may see even greater crypto adoption across all income levels. In Latin America and Africa, 46% of respondents stated that even volatile cryptocurrencies can serve as inflation hedges.
After all, the fiat money supply is arbitrary and infinite, while cryptocurrencies like Bitcoin are set in decentralized stone. For this reason, the majority of crypto owners across continents see their investments with a long-term outlook.
Predictably, in the fiat money stronghold, the US, the narrative is different. Only 16% of respondents view cryptos as an inflation hedge. Nonetheless, crypto ownership in the US rose by 44%, with most (85%) Americans viewing it as a long-term store of value.
Gender Gap Closing in Developing Nations
In Indonesia and Nigeria, women now own cryptocurrencies at the same rate as men, at 51% and 50% respectively. In developed, liberal, and urbanized Israel, 51% of crypto holders are women. In the more traditional UAE, the highly urbanized third richest country, only 32% of women are crypto-holders, the same as in the US.
European women are in the same boat, making up 34% of crypto owners. With all things equal, it appears that economic security in developed nations is a stumbling block for female crypto adoption. The same applies to more traditional societies, like UAE and India. However, when accounting for crypto-curious, women make nearly half (47%) of future crypto holders.
This is especially visible in Denmark, where 18% of crypto owners are women, while 52% are crypto-curious women. Likewise, this ratio for Norway is 31% to 51%. In the US, the difference is the smallest, at 32% vs. 39%. Accounting for both age and gender, 2022 is on a trajectory to look like this.
If global crypto adoption is to continue or accelerate, education is of primary importance. Respondents rated security, usage, purchase, trust, and even lack of government backing as their top concerns. All of those stem from a lack of education, with only the volatility concern remaining. However, volatility resolves itself if education neutralizes other concerns because it would then spur stability-inducing adoption.
This article originally appeared on The Tokenist
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