Global adoption of cryptocurrency has taken off in recent months as the sector continues to record an increase in valuation and popularity. However, global crypto ownership remains relatively low but continues to pick up, led by specific regions.
According to data acquired by Finbold, approximately 10.2% of the global internet-using population owns some form of cryptocurrency (according to a survey conducted in the third quarter of 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 Filipino users. US users rank 14th with a 12.7% share.
Elsewhere, ownership is more contracted among individuals aged 25 to 34, with men representing 15.5% while the share of women is 9.5%. Internet users between the ages of 16 and 24 saw men make up 13.3%, while female owners made up 6.4%. Overall, most crypto owners are concentrated in people between the ages of 16 and 44. Cryptocurrency ownership data is provided by the global digital information platform DataReportal.
Drivers for holding crypto
In general, some countries are already ahead of the ownership curve while others are significantly behind. However, the numbers could change as the industry grows with various cryptocurrencies moving to mainstream-inspired institutional entry into the space. Notably, with the popularity, the ability to earn money quickly has become a key motivation for holding different assets. For example, last year Bitcoin was among the best performing investment products.
The increased adoption has led to the integration of cryptocurrencies into people’s daily lives, replacing some of the roles played by traditional monetary systems. For example, the cryptocurrency sector offers services like lending and is emerging as alternatives to conventional financial aspects like paying salaries.
According to Finbold’s previous report, about 55% of holders in the United States would like to earn their salary in digital assets citing greater financial flexibility. This comes in the context of El Salvador declaring Bitcoin legal tender.
Ownership of more than 10% can also be considered significant, as cryptocurrencies are a fairly young asset class that are increasingly emerging as a core investment product. Ownership will likely increase as more people continue to understand how cryptocurrencies work.
Over the years, the cryptocurrency industry has been characterized by barriers to entry for new investors. This has been associated with challenges such as lack of education on how blockchain works and how to store digital assets.
Developing Countries Hosting Most Crypto Holders
Elsewhere, major cryptocurrency holders are based in developing countries that have experienced economic turbulence in recent years, a situation that has been complicated by the coronavirus pandemic. The sector appears as an alternative to the unbanked population in these countries and a protection against rising inflation in a context of local currency devaluations.
Additionally, residents have also turned to cryptocurrencies to secure their savings and a form of cash back to family and friends. This is facilitated by the fact that some countries like Nigeria have high emigration.
One of the attractions of the cryptocurrency industry is the decentralized nature which eliminates the need for intermediaries like banks and brokerages and instead allows users to interact directly with each other.
This has resulted in a decentralized financial system that remains largely unregulated, a scenario that has led to critics claiming that cryptocurrencies have the potential to destabilize the traditional financial sector.
It should be noted that the ownership metric may change in the future depending on the regulatory outlook. Several jurisdictions are currently working on legislation to regulate the sector as debate continues over whether various assets should be classified as a medium of exchange or as securities.
Notably, the volatility aspect has been cited by various jurisdictions intending to ban the asset. Besides China, Russia is the latest country to propose an outright ban on cryptocurrency citing shortcomings such as volatility and the possibility of various assets being exploited to commit fraud.
The central bank’s proposal has faced opposition from politicians led by former President Dmitry Medvedev, who believe banning cryptocurrencies will be a step in the opposite direction. Initially, President Vladimir Putin called on major state agencies to find consensus on cryptocurrencies.