This SAYS It ALL!! Crypto Adoption Incoming!!

<strong>This SAYS It ALL!! Crypto Adoption Incoming!!</strong>

For as long as crypto has been in existence, the hope of worldwide use and adoption has been ever present. Some say it’s a pipe dream at risk of becoming a meme, but the truth may surprise you. I’m going to take a look at a recent report that shows that crypto mass adoption is closer than you think. You don’t want to miss this.

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Report Intro

Let’s get on with this adoption matter. The report that I’m talking about is Gemini’s recent Global State of Crypto Report for 2022. It was structured as a global survey that asked 30,000 people in over 20 countries about their views on cryptocurrency. It shares statistics on global adoption barriers to entry and other attitudes towards crypto. You can see the exact breakdown of the respondents’ geographies over here. It seems to be a pretty diverse mix and incorporates people from every continent.

Gemini also tried to give the most representative view of the adult population in each country between the ages of 18 and 75 with a yearly income of $14,000 or more. Now that seems like a pretty low household income, but I can only assume this was chosen because of the low household incomes adjusted for purchase power in some of these countries.

You should also note that this survey was conducted online over a period of a little over three months between November of 2021 and February of this year. That’s important to note because the perception that people have of cryptocurrency is, of course, influenced by how the markets are looking at the time. For context, when the survey was started, Bitcoin was trading at close to $60k and it fell all the way down to $35k before ending the period at 40k. So that’s helpful context before we take a look at the actual survey data.

This was a third party agency on behalf of Gemini, and I don’t think the letter needs much of an introduction as it’s perhaps one of the most well-known exchanges in the world. The reason why it conducted the survey is that:

‘… it is a top priority for us to understand how crypto is being adopted and deployed around the world as well as the barriers to entry. We also believe it’s necessary to ensure the development of a safe and secure ecosystem that can fulfil the promise that blockchain technology and cryptocurrency represent.’

 I couldn’t agree with that more. Without further ado, let’s jump into one of the first stats that the report leads with.

2021, Adoption Year

How many people who own cryptocurrency first bought it last year in the U.S., Latin America and Asia? Almost half of holders bought it for the first time in 2021. In Brazil, Hong Kong, and India, more than half started investing last year. Perhaps surprisingly, Europe had some of the most OGs, with most holders having first bought in long before 2021. However, with almost 40 percent of European users making their first purchase last year, it’s still pretty clear 2021 was a massive year for newbies entering the space.

If we take a look at the data across all users in the survey, a full 41% first got into crypto last year. Now this is interesting as I actually pushed a poll on twitter towards the end of last year asking my followers when they bought their first crypto. 48.6% of you said that it was in the last year, i.e. 2021, and that’s not too far off these numbers.

Perhaps it’s slightly skewed towards newer buyers. But I think that could be down to the fact that my followers tend to skew more towards the beginner end of the spectrum.

So what does this tell us, though? Well, it’s both good and bad. It’s good, of course, because it means more people than ever bought their first cryptocurrency last year. Last year, more people entered the space for the first time than ever before. However, it also does worry me as it means that many of the people that got into the markets last year may not have witnessed a proper bear market, i.e., a time of sustained market inactivity brought on by low prices and reduced trading volumes. In other words, there’s a strong likelihood of severe retail capitulation—fewer people with diamond hands ready to huddle for an extended period of time.

Of course, it’s perhaps less of a concern now as it was back in 2018, and that’s because of the wide scale institutional adoption that we’ve seen since then. Large managers are more likely to huddle than retail traders. Anywho, on to the next page of the report.

2022, More Adoption Incoming?

This takes a look at cryptocuriosity across surveyed countries. It asks those people who currently do not own any cryptocurrency how curious they are about it. Curious in that they would consider buying some of it or would perhaps want to learn more about it. Globally, that number stood at 41%. However, people in Europe appeared to be the most crypto-curious and open to learning more about it. 58% of the respondents in that region fall into that bucket. Other countries that are crypto-curious include the likes of Colombia and the UAE.

This chart over here is pretty interesting as it breaks down this cryptocuriosity by gender. What it shows is that only in 4 of the 20 countries surveyed were men more cryptocurious than women. What this shows is that in the other 16 countries, newbie adoption this year is more likely to be driven by women than by men.

As you can see, this next page then gives a broad overview of the adoption across regions. As you can see, Brazil and Indonesia have some of the highest adoption rates in the world, at more than 40%. This did surprise me somewhat, as you don’t often hear about adoption in these regions, especially in Indonesia.

In terms of population, Indonesia and Brazil both have over 485 million people, which is more than 40 million more than all of the EU countries combined. It would be a massive win for adoption now. I will, of course, caution though, that I don’t think that the survey respondents are representative of the broader population. Let’s not forget that those respondents that were chosen had a family household income of over $14,000. The average household incomes in Indonesia and Brazil are $3,800 and $7,800, respectively, but they are encouraging numbers nonetheless.

The next page over here looks at the adoption rates for high-income users in developed countries. What it shows is that those people in Europe, particularly in Germany and France, have higher adoption rates among the high income earners. That said, I would take these stats with a pinch of salt and that is because they say that the sample sizes, in some cases, are below 100, so they can’t really be seen as representative.

Crypto Diversity

On to the next slide, and this is for all the ladies out there. It’s the global adoption stats for crypto among women. Unsurprisingly, in Indonesia and Nigeria, women make up the most significant percentage of crypto investors in the country: 51% and 50%, respectively, in developed markets. In France, we have the most female adoption as a percentage of crypto users: 45% in total.

You can see all of the stats here where they’re broken up according to those in the developed and developing worlds. One of the outliers in the developing world bracket is the UAE, where there are way more men who are crypto users than there are women. However, this does make sense when it’s viewed in conjunction with those cryptocurious stats. As we saw earlier, women in the UAE just don’t seem to be as interested in crypto as their male counterparts, though there may be other cultural factors at play here too.

Speaking of crypto curiosity and adoption trends, next page over here is also particularly interesting. It compares the statistics of current adoption in these countries with the cryptocurious trends. One thing is clear, and that is that although women make up a pretty sizable portion of the crypto adopters in these countries, that is likely to grow next year as those who are cryptocurious make their first moves.

Something else that’s worth noting is that Latin American women are more likely to adopt crypto when compared with other regions, and they are more cryptocurious. This just goes to show that there’s a strong correlation between those who are crypto-curious in one year and those who are more likely to take the plunge in the next. I would not be surprised if these ownership demographics in Latin America continue to shift towards women.

This page reinforces the notion that we could further close the crypto gender gap by having more women consider their first purchases this year. On top of that, new adopters tend to slant towards a younger demographic this year when compared to last.

Perception

Moving on, though, I now want to look at the perception that the survey respondents had about cryptocurrency more generally. On next page, they asked some of those people who had not purchased crypto. What were their reasons?

Something that stands out here is that Latin American coiners have fewer concerns around trust in crypto or lack of government backing. Perhaps because of their personal experience with their own governments, you can see a similar slant to those in Africa. By the way, I do find it quite disappointing though that we, as European coiners, have trust issues with crypto when it is literally one of those things that doesn’t need any trust. It is trustless.

One more thing that stands out here across regions is that two of the biggest concerns people have about crypto are security and that they don’t know how to buy or hold it. This is actually something positive in my eyes because it’s something that can be easily overcome as compared with those who are just plainly skeptical. It’s also relatively simple to show them how to buy or sell. Furthermore, the point about volatility is also not unsurmountable.

As we’ve seen over the past five years, as crypto has been more widely bought and traded, volatility has been on the decline. And of course, concerns about regulation. It seems that this is a pretty pressing concern for many who have not yet entered the space. People in Latin America, Asia, and the Middle East are also worried about the tax implications of cryptocurrency, which is a fair concern. I mean, the mere thought of filing my crypto taxes sends shivers down my spine.

Anywho, next section is music to my ears. This shows that crypto educational content could be the key to people’s getting into crypto as opposed to recommendations from friends. This is important because far too many people in the past have gotten into crypto on the advice of their friends. Some of these recommendations have been, shall we say, not great. Now, nothing is worse for the adoption of cryptocurrencies than someone getting burned on the latest Dogecoin or Rug Pull NFT. However, if they found a solid educational resource like, I don’t know, a crypto youtube channel, for example, then they would be more willing to take the plunge.

Here is a more granular breakdown of these stats. As you can see, countries in Latin America and Africa think that better crypto education can help ease them into the markets.

Future of Money

The next section, well, this starts off with perhaps one of the most important yet pressing questions we all have: is crypto the future of money? As you can see, the divergence between developing and developed countries is clear. People in Latin America, Africa, Asia, and the Middle East are more likely to see cryptocurrency as the future of money in the United States, whereas only 23% of respondents in Europe did.

So, what’s the deal with this? People in developing countries have had to deal with periods of monetary instability. They’ve seen firsthand the risks that can come from currency devaluations and financial crises, from the Asian financial crisis of 1997 to the constant instability we see in Latin America. In fact, from all of the conversations I’ve been having with people from around those regions, there is a general level of mistrust in these centralised entities. On the other hand, if we were to flip this around, people in the west, in Europe, North America, etc., are far too complacent with the status quo.

This argument is further confirmed by this chart on the next page. It looks like how many people who have not bought cryptocurrency yet will be considering it over the coming year.

They’ve broken this down into different countries, and they’ve mapped this to the devaluation of the local currency versus the dollar over the past 10 years. It’s pretty stark, right. Those countries that have had a devaluation of over 50% are at least five times more likely to buy crypto in the coming year. Brazil, Mexico, South Africa, and India.

Of course, a currency devaluation doesn’t only make a nation’s currency more expensive in terms of U.S dollars, but it also drives high levels of inflation locally, and speaking of which, inflation is the subject of questions on the next page.

They ask people whether they viewed crypto as an inflation hedge and whether it was a good asset to diversify their broader risk when it comes to the inflation point. Again, those in Latin America and Africa were far more likely to see Bitcoin as an effective hedge against it than those in Europe and the US. Allow me to explain why I believe both are correct. With the countries in Latin America and Africa, we cannot really appreciate the levels of inflation that they’ve witnessed in the west. That’s as a result of the massive devaluations that they’ve seen in their currencies. Hence, even if crypto is incredibly volatile, it’s better than holding their savings in the local currency. In the west, however, inflation has been much more subdued, at least in the survey period. Even if inflation was running at historically high levels, it’s nowhere near hyperinflation. This means that a cryptocurrency that’s more volatile than your money appears less favourable as an inflation hedge.

So knowing that crypto is a lot more volatile than the fiat in your bank account tarnishes your view of whether it is indeed a hedge. However, I would love to see how these stats would look if they polled the same people in the US right now with inflation running at over eight percent.

Anyhow, this chart over here shows whether people think that crypto is an important diversification to one’s portfolio. Unsurprisingly, those in regions like Latin America, Africa, and the Middle East think that it is a good way to diversify. At least 56% in the U.S see it that way, but only 49% in Europe.

I mean, that doesn’t really make sense to me unless they have a portfolio that’s fully correlated with crypto assets. There will always be a diversification benefit from adding more assets. Now onto the next page, I’m also quite happy with. That’s the amount of crypto adherents who have employed a buy and hold strategy as a store of value. That’s 79% across all regions. I am also a long-term investor and although I do sometimes make trades in my portfolio, these are usually based on fundamentals, which by their very nature usually play out over a much longer period of time.

After this, the report has a few more pages that look into the regional highlights. I’ve already covered a lot of this already throughout the report, so I won’t go over the same ground twice.

Conclusion

That’s it for most of the survey, but now it’s time to give you some of my thoughts on it. I’ll start by saying that I’m pretty encouraged by it. While the main headline numbers that you need to focus on are the fact that crypto curiosity is generally quite high, there are more and more people who are now considering taking their first steps into the crypto space. While we saw a great deal of adoption last year, I think that this year could be just as surprising. Of course, newbie adoption is a double-edged sword. The vast majority of people in crypto right now have not witnessed a bear market or a sustained crypto winter. How likely they are to stick around when it comes is anybody’s guess. This will, of course, depend on how many people are really here for the long term huddle and how many people are what we call crypto tourists.

However, it is encouraging to see that the vast majority of people who’ve bought crypto did so for the long term huddle. I’m also encouraged to see that the crypto industry is shaking the image of being male-dominated. It seems that last year we had a breakout year for crypto ladies entering the fray. The fact of the matter is that crypto is colour and gender blind and no one should feel that they can’t get involved in the sector.

Another thing that really stuck out for me in this survey is the varying adoption and curiosity levels between people in different countries. It’s quite clear that those in emerging markets are more willing to trust cryptocurrency and distrust their fiat money systems. Of course, that makes sense. That said, nothing is more powerful than lived experience, and those people who’ve been forced to look for alternatives to their local currencies are finding their way to crypto.

I’m also quite worried about the levels of complacency in western markets about the reliability of the fiat money system. Just because you don’t have personal experience with hyperinflation and arbitrary asset seizures doesn’t mean that it can’t happen to you.

Furthermore, it is exactly this complacency that the central bankers will use in order to foist their dystopian CBDC’s on citizens. But I suppose this all comes back to education. I still firmly believe that the key to awareness is solid knowledge. As is evidenced by this survey, more and more people think that this education is the measure that will help them feel comfortable with the space. While that’s our mission at the coin bureau, you good people can help too.

Let’s also not forget that we were all once beginners ourselves. We were also intimidated by this weird and wonderful crypto journey we were embarking upon. So in 2022, let’s make crypto boom by using education to take adoption to the moon and that’s it for my overview of the Gemini year in crypto.

[This article is a transcription of a video made by Coin Bureau]

Original video: https://youtu.be/J6-LCwPRJWo ]