Thursday, June 20, 2019

Research: Bitcoin Adoption Grows In Emerging Market Organically

Bitcoin adoption in recent time has increased because of its speculative use. Many crypto investors are not into it for its use as a currency, as it was designed to be. Recent research conducted by Passport Capital, however, reveals that Bitcoin adoption has grown in emerging markets without the incentive of speculative use.

Emerging Markets Interest In Cryptocurrency

Passport Capital noted in a tweet on April 3rd that “At @PassportCapital we continue to observe divergence between LocalBitcoins volume in Developed and Emerging Markets. Volume in Developed Markets is tracking price (speculation) while volume in Emerging Markets has stabilized and is growing despite the price (utility).” The research reveals cryptocurrency trading volume in emerging markets now exceeds that of developed markets.

Data from Coin.Dance along with MSCI classification for the emerging and developed market was used for the research. The developed markets include Europe, America, Australia, Japan, Singapore, and New Zealand. The emerging markets include Brazil, Chile, Colombia, Mexico, Peru, Czech Republic, Egypt, Greece, Hungary, Poland, Qatar, South Africa, Turkey, UAE, China, India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Taiwan, and Thailand.

The report noted that LocalBitcoins volume in emerging markets first overtook developed markets’ in early 2017. Afterward, there was a similar trading volume in the 2nd and 3rd quarter. However, the peer-to-peer Bitcoin marketplace site in poorer nations seriously outperformed developed markets at the tail end of 2017 and have done ever since.

Meanwhile, the fascinating thing about Passport Capital’s report is that interest in trading on LocalBitcoins in developed nations seems to follow price while the volume from emerging markets have grown in recent years, even as the price has declined. This indicates that the large chunk of crypto investors in the developed markets are speculative investors, while those in the emerging markets are using Bitcoin for what its meant.

LocalBitcoin trading volume of the developed market increased in 2017 during the Bitcoin bubble, while there was a reversal to this during the bear market. In contrast, the trading volume in the emerging market increased during the bear market.

Emerging Markets Adopting Cryptocurrency

Meanwhile, adoption of cryptocurrency in the emerging market can be said to have been propelled by the utility it offers, in the absence of basic banking facilities. The developed markets have basic banking facilities which make their need for cryptocurrency only for speculative purpose mostly.

Also, most emerging markets and third world countries are facing acute inflation which makes the use of cryptocurrencies the best option for most citizens as seen in Venezuela of recent.

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