US didn't use the most cryptos in 2020. These countries did!

Highlights

• In 2020, Nigerians emerged as the biggest users of cryptocurrencies according to a survey by Statista

• The US ranked below countries like China, India, and even Vietnam and Philippines

• The crypto world saw many new developments in 2021, and it may have brought people in North America closer to cryptos

The debate around regulation of cryptocurrencies and volatility in prices aside, crypto enthusiasts exist in almost every country.

Which are the top countries that use cryptocurrencies? No, the US wasn’t at least in 2020. Let’s dig into data and find out.

Nigeria

In a survey conducted by Statista, a German consumer and market data company, Nigerians emerged as a strong backer of cryptocurrencies.

It is quite surprising that almost one-third participants reported to have used or owned a crypto token. In a country where nearly 40 per cent people suffer from poverty, crypto transactions supposedly bring relief from high remittance costs. Reports say that Nigerians prefer phones to make payments, and many shops have allowed crypto integration in their payment systems.

Nigeria also reels from high inflation, and lately, Bitcoin and other cryptocurrencies have emerged as the preferred choice of many as a hedge against inflation.

Also read: Can Bitcoin be termed as the ‘asset of the century’?

The US crypto usage was dwarfed by many

According to Statista, only 6 per cent respondents in the US reported use or ownership of cryptos. This is a very low penetration rate when compared to countries like Vietnam and Philippines where 20 per cent respondents reported crypto use in 2020.

In Turkey, where use of cryptocurrencies was outlawed in April 2021, 16 per cent respondents said that they used cryptos in 2020. This figure could have come under pressure considering the shutting down of two major crypto exchanges, Thodex and Vebitcoin, following the April ban. In October, another major exchange, Coinzo, announced its closure, and gave six months to users to withdraw their holdings.

Switzerland, India, China, and Peru were the other countries that reported higher crypto use than the US in 2020. It is notable that the regulators in China began a sweeping crackdown on cryptos in 2021. It was one of the reasons that triggered a major crash in Bitcoin prices in mid-2021. Other advanced economies of Germany and Japan, with 5 per cent and 4 per cent penetration respectively, also made the cut in the list.

Crypto use by countries in 2021

Though data has yet to be collated and published, it is likely that the list will undergo a major shuffle in 2021.

Several developments have impacted sentiments of investors. First, the world’s first Bitcoin ETF started trading earlier this year on Canada’s Toronto Stock Exchange (TSX). This would have lifted exposure to cryptos in North America. This was followed by the S&P Dow Jones launching Bitcoin and Ether indices to track movement in prices, an event that raised the status of cryptos despite underlying volatility.

Also read: 7 Altcoins up over 1000% in 2021

A major event in the crypto world came when El Salvador declared Bitcoin as a legal tender. The country aims to bring down costs of remittances by using blockchain-based digital currency. This was followed by an unexpected approval for first Bitcoin ETF in the US. SEC’s nod lifted the spirits of crypto backers.

It is likely that the use of cryptocurrencies and their ownership, whether direct or indirect through ETFs, would have grown in countries like the US, Canada, El Salvador, and even in Pakistan. In contrast to this, usage in China could have come under stress due to government’s negative stance.

In the US, tech billionaires like Elon Musk, Jack Dorsey, Michael Saylor, and now Tim Cook of Apple have been bullish on cryptos. Musk and Cook have accepted holding cryptos, and Saylor’s MicroStrategy is one of the biggest corporate investors in Bitcoin. These events are likely to have convinced people in North America to bet more on cryptocurrencies.

Also read: MicroStrategy bitcoin holding soars, dwarfs Tesla's

Image description: BTC holding of Tesla and MicroStrategy

Crypto gains in 2021

Crypto returns in 2021 made fortunes for many backers. This, however, depends squarely on the timing of investment in any particular crypto.

Bitcoin, the biggest cryptocurrency with a market cap that outshines even Facebook and Tesla, is up over 120 per cent in 2021 as of now. The cryptocurrency lately touched a new high of US$68,000, and many analysts expect a further rise in price. Bitcoin’s recent rally was fueled by approval of ProShares Bitcoin Strategy ETF, which is trading on the New York Stock Exchange under the ticker BITO. The ETF gives an easy option to investors to have indirect exposure to Bitcoin without the hassle of storage.

Image description: Bitcoin price movement in 2021

But it is not Bitcoin that has gained the most in 2021. Its biggest rival, Ether, which is riding the wave of Ethereum’s blockchain wider adoption within the crypto world, is up nearly 500 per cent in 2021.

Altcoins like Solana (SOL), Axie Infinity (AXS), Dogecoin (DOGE), and Shiba Inu (SHIB) have given returns even higher than Ether in 2021. The rise of blockchain-based gaming, meme cryptocurrencies, and non-fungible tokens (NFTs) in 2021 was the highlight of the crypto world.

Facebook’s metaverse tilt has lifted the price of many blockchain games linked tokens like AXS. These factors must have shaped the sentiments of investors in the West, a region that lacked crypto penetration at least until 2020.

Also read: FB’s metaverse can be a blessing for these 5 blockchain games

Countries eyeing the cryptoverse 

Recently, Pakistan’s Sindh High Court has reportedly approved a committee to study the use of cryptos and submit a detailed report. The committee has a deputy governor of the State Bank of Pakistan and officials from multiple ministries as members. In Brazil, a bill has been proposed to make payments to employees in cryptocurrencies legal. All this comes against a backdrop where retail investors are flocking to cryptos around the world, particularly in emerging market economies.

Bottom line

The 2020 survey on cryptocurrency usage and ownership by countries revealed Nigerians as the biggest backers of cryptos. However, much has changed in 2021, and the mainstreaming of cryptos is expected to have brought people in the US, Canada and other developed nations closer to cryptos. The 2021 survey on crypto use by countries is expected to shine the light on this big shift.