The global cryptocurrency adoption has taken off in recent months as the sector continues to record a surge in valuation and popularity. However, the global crypto ownership remains relatively low but still picking up, led by specific regions.
According to data acquired by Finbold, about 10.2% of the global population using the internet owns some form of cryptocurrency (as per a survey carried in Q3, 2021 and published on January 26, 2022). Thailand accounts for the highest share at 20.1%, followed by Nigeria at 19.4%, a similar percentage to Philippine users. United States users rank in the 14th spot with a share of 12.7%.
Elsewhere, the ownership is more contracted among individuals aged between 25-34 years, with males accounting for 15.5% while the female share stands at 9.5%. Internet users aged 16-24 years saw males account for 13.3%, while female owners stood at 6.4%. Overall, most crypto ownership is concentrated among individuals aged between 16-44 years. Data on cryptocurrency ownership is provided by the global digital insights platform DataReportal.
Drivers for crypto ownership
In general, some countries are already ahead of the curve in ownership while others lag significantly. However, the figures might change as the sector grows with various cryptocurrencies shifting to the mainstream inspired institutional entry into the space. Notably, with the popularity, the possibility of making quick money has emerged as a critical motivator for holding different assets. For example, last year, Bitcoin was among the top-performing investment products.
The increased adoption has resulted in cryptocurrencies becoming part of people’s daily lives, replacing some of the roles played by the traditional monetary systems. For instance, the cryptocurrency sector offers services like lending and emerging as alternatives to conventional finance aspects like paying salaries.
According to Finbold’s previous report, about 55% of holders in the United States would like to earn their salaries in digital assets citing greater financial flexibility. This comes in the backdrop of El Salvador declaring Bitcoin a legal tender.
The over 10% ownership can also be considered significant since cryptocurrencies are a fairly young asset class that is increasingly emerging as an essential investment product. The ownership will likely surge as more people continue to understand how cryptocurrencies work.
Over the years, the cryptocurrency sector has been characterized by entry barriers for first-time investors. This has been coupled with the challenges like lack of education on how the blockchain works and how to store digital assets.
Developing countries hosting most crypto holders
Elsewhere, top cryptocurrency holders are based in developing countries that have experienced economic turmoil in recent years, a situation that was complicated by the coronavirus pandemic. The sector is emerging as an alternative to the unbanked population in these countries and a hedge against rising inflation amid local currency devaluations.
Additionally, residents have also turned to cryptocurrencies to secure their savings and a form of money remittance to family and friends. This is aided by the fact that some countries like Nigeria have a high emigration population.
One of the cryptocurrency sector’s appeals is the decentralized nature that eliminates the need for intermediaries like banks and brokerages and instead allows users to interact with each other directly.
This has resulted in a decentralized financial system that remains largely unregulated, a scenario that has led to critics stating cryptocurrencies can potentially destabilize the traditional financial sector.
Worth noting is that the ownership metric might alter in the future based on the regulatory outlook. Several jurisdictions are currently working on legislation to regulate the sector as debate continues whether various assets should be classified as a medium of exchange or securities.
Notably, the volatility aspect has been cited by various jurisdictions intending to outlaw the asset. Besides China, Russia is the latest country to propose a total cryptocurrency ban citing shortcomings such as volatility and the possibility of various assets to be exploited in committing fraud.
The central bank’s proposal has been met with opposition from politicians led by former President Dmitry Medvedev who believes banning cryptocurrencies will be a move in the opposite direction. Initially, President Vladimir Putin had called on leading state agencies to find a consensus on cryptocurrencies.