- Cryptocurrencies are concentrated in Latin America and Africa.
- The share of institutional investors in cryptocurrency is insignificant.
- The number of cryptocurrency users has tripled.
In just two years, the number of cryptocurrency users has tripled: from 35 million in 2018 to 101 million in the third quarter of 2020. Experts are confident that this is not the limit.
Who owns cryptocurrencies
The coronavirus epidemic and the global closure of borders between states around the world have led to rapid growth in the cryptocurrency market. In just two years, the number of users has tripled, and the number of registered cryptocurrency wallets has increased by 37%: from 139 million in 2018 to 191 million in the third quarter of 2020. This is evidenced by data from a large-scale study by Harvard University aimed at studying the development of the crypto industry in the world.
Number of users and the number of registered accounts
If we talk about the types of cryptocurrency holders, research shows that most of the market is still focused on retail traders and holders, while institutional investors are only a third of all users. Of the 36% of institutional investors who invest in cryptocurrency today, 3 out of 5 believe that digital means of payment have positive prospects and will be accepted by a wide range of users.
At the moment, institutional investors invest in cryptocurrencies mainly through hedge funds, purchasing options, and futures on bitcoin and other cryptocurrencies. The main limiting factor that affects the development of the sector remains price volatility and the possibility of market manipulation by large coin holders.
According to the data, the distribution of investors in different countries of the world is uneven. And if Europe and North America are aimed at developing institutional investment in cryptocurrencies, then in Latin America and the Caribbean, on the contrary, the focus is shifted to retail investors.
The data above shows that North America has the largest number of hedge funds targeted at institutional investors, while up to 50% of mining companies are concentrated in the Middle East and Africa.
Where does cryptocurrency live?
A separate part of the study is devoted to the geographical distribution of cryptocurrency. Analysts wanted to find out the regions where users of digital payment assets are concentrated, so they conducted a detailed analysis of the real location of hodlers.
Cryptocurrency users today live all over the world, but the largest concentration is in Latin America and the Caribbean, Europe, and the Middle East.
Cryptocurrencies are popular in countries with dismal economies. This may explain the situation of the popularity of cryptocurrencies in Latin America and Africa. Due to the volatile economic environment, many Latin American businesses prefer cryptocurrencies to their local currency for commercial transactions, according to a report titled “How Latin America Mitigates Economic Instability With Cryptocurrency”.
According to World Bank statistics, remittances account for 1.7% of total GDP in Latin America, and only the Middle East, North Africa, and sub-Saharan Africa have a large share of GDP made up of remittances from abroad. On-chain data is also consistent with this: 90% of the cryptocurrency received by Latin America comes from outside the region.