Where new bitcoin users are around the world

Global adoption of cryptocurrency has taken off in the last year, up 881%, with Vietnam, India and Pakistan firmly in the lead, according to new data from Chainalysis.

It is the second year the blockchain data firm has released its Global Crypto Adoption Index, which ranks 154 countries according to metrics such as peer-to-peer exchange trading volume, rather than gross transaction volume, which typically favors developed nations with high levels of professional and institutional crypto buy-in.

The point of this index is to capture crypto adoption by “ordinary people” and to “focus on use cases related to transactions and individual saving, rather than trading and speculation.” The metrics are weighted to incorporate the wealth of the average person and the value of money generally within particular countries.

The top 20 countries are largely comprised of emerging economies, including Togo, Colombia, and Afghanistan.

Meanwhile, the United States slipped from sixth to eighth place, and China, which cracked down on crypto this spring, dropped from fourth to thirteenth.

Chainalysis ascribes the rising adoption levels in emerging markets to a few key factors.

For one, countries like Kenya, Nigeria, Vietnam, and Venezuela have huge transaction volumes on peer-to-peer (P2P) platforms when adjusted for purchasing power parity per capita and the internet-using population.

Chainalysis reports that many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don’t have access to centralized exchanges.

The report also says residents of these countries are often turning to cryptocurrency to preserve their savings in the face of currency devaluation, as well as to send and receive remittances and carry out business transactions.

Matt Ahlborg, a peer-to-peer data analyst, tells CNBC that Vietnam is one of the top markets for Bitrefill, a company that helps customers live on cryptocurrency by buying gift cards using bitcoin.

“Vietnam stood out to me because it dominated the index,” explained Chainalysis’ Director of Research, Kim Grauer, who compiled the report.

“We heard from experts that people in Vietnam have a history of gambling, and the young, tech-savvy people don’t have much to do with their funds in terms of investing in a traditional ETF, both of which drive crypto adoption,” continued Grauer.

Nigeria, according to Grauer, is a different story. “It has a huge commercial market for crypto. More and more commerce is done on the rails of cryptocurrency, including international trade with counter parties in China.”

These top-ranking nations have another thing in common, according to Boaz Sobrado, a London-based fintech data analyst. “Many have capital controls or a strong emigrant and immigrant population,” said Sobrado.

Take Afghanistan, a country currently in turmoil due to a recent overthrow of government.

“Afghanistan on top makes sense from a capital controls point of view, given it’s hard to move money in and out,” said Sobrado.

The correction for purchasing power parity and gross domestic product may also have boosted its placement, given that Afghanistan is one of the world’s poorest countries.

Analysts note that measuring cryptocurrency adoption at the grassroots level isn’t easy.

Sobrado suggests that “the methodology has a huge blindspot, which is coincidentally Cuba.”

“Unlike many other countries, sanctioned nations don’t have good and clear data on P2P markets,” said Sobrado.

Because of that, he believes that sanctioned jurisdictions are going to be necessarily underestimated, simply because it is harder to track those transactions.

Ahlborg points out that there is no perfect way to measure per capita global crypto adoption, but says this index is “one of the best we have.”

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