Inflation is nothing to laugh at...
In some countries suffering from unmanageable inflation rates, cryptocurrency adoption has gone through the roof as people find different ways to hedge against it. It's not exactly funny when your salary worth thousands of dollars is suddenly worth cents over night, or when buying bread is suddenly equivalent of what a Lamborghini cost the week before.
For example...
Having seen horrendous monetary policies pushed by the Nicolas Maduro dictatorship, Venezuela is currently experiencing astronomical inflation rates of >2000%. The US Dollar is officially banned in Venezuela, so one of the ways of hedging against this has been through the adoption of crypto, which is used both for remittances and as replacement to the local Venezuelan Bolivar.
Coincidentally, Venezuela has one of the highest crypto adoption rates, currently standing at 10.34%. Also, having extremely cheap and green electricity (see my article here on the 124 cheapest and greenest countries to mine in), a lot of Venezuelans have turned to Crypto mining but the government is not shy in imposing crackdowns.
But is %Crypto Adoption high in every country with high inflation?
To answer this question, I have gathered %Crypto Adoption data from here and monthly %inflation rate data from here.
In total, comparative data for 128 countries was available and I have summarized it in the table below.
128 countries ranked by %Inflation rate and with Cryptocurrency adoption data
Rank Country %Inflation Rate %Percentege of people who own Crypto
------ ------------------------ ----------------- --------------------------------------
1 Venezuela 2720.00% 10.34%
2 Sudan 423.00% 0.91%
3 Lebanon 101.00% 1.03%
4 Suriname 54.00% 0.93%
5 Syria 52.43% 1.02%
6 Iran 43.60% 1.96%
7 Ethiopia 26.40% 0.98%
8 Zambia 24.60% 1.48%
9 Turkey 18.95% 2.94%
10 Nigeria 17.38% 6.31%
11 Kyrgyzstan 14.60% 0.97%
12 Haiti 12.70% 0.94%
13 Georgia 11.90% 2.89%
14 Uzbekistan 11.10% 1.03%
15 Ukraine 10.20% 12.73%
16 Belarus 9.80% 3.73%
17 Malawi 9.10% 0.92%
18 Ghana 9.00% 3.01%
19 Brazil 8.99% 4.88%
20 Botswana 8.90% 1.06%
21 Kazakhstan 8.40% 1.73%
22 Pakistan 8.40% 4.10%
23 Dominican Republic 7.88% 1.86%
24 Uruguay 7.30% 1.44%
25 Togo 6.80% 1.59%
26 Mauritius 6.50% 2.47%
27 Russia 6.46% 11.91%
28 Kenya 6.44% 8.52%
29 Tunisia 6.40% 1.04%
30 Congo 6.23% 1.11%
31 Madagascar 6.06% 1.09%
32 Sri Lanka 5.70% 1.50%
33 Iraq 5.60% 0.93%
34 India 5.59% 7.30%
35 Mozambique 5.48% 1.60%
36 Egypt 5.40% 1.75%
37 United States 5.40% 8.31%
38 Paraguay 5.20% 1.05%
39 Estonia 5.00% 2.41%
40 Poland 5.00% 2.50%
41 Romania 4.95% 2.20%
42 Lithuania 4.70% 2.58%
43 Papua New Guinea 4.65% 0.89%
44 Hungary 4.60% 1.36%
45 South Africa 4.60% 7.11%
46 Chile 4.50% 2.62%
47 Jamaica 4.40% 1.32%
48 Iceland 4.30% 0.99%
49 Honduras 4.26% 1.03%
50 Nepal 4.19% 1.45%
51 Nicaragua 4.12% 1.11%
52 Cyprus 4.00% 1.67%
53 Namibia 4.00% 1.12%
54 Philippines 4.00% 3.98%
55 Colombia 3.97% 6.14%
56 Guatemala 3.82% 1.34%
57 Peru 3.81% 3.74%
58 Germany 3.80% 2.62%
59 Tanzania 3.80% 1.83%
60 Canada 3.70% 3.20%
61 Burkina Faso 3.50% 0.94%
62 Ivory Coast 3.50% 1.30%
63 Moldova 3.50% 1.35%
64 El Salvador 3.43% 1.94%
65 Czech Republic 3.40% 2.23%
66 Macedonia 3.40% 1.13%
67 Malaysia 3.40% 3.15%
68 New Zealand 3.30% 1.76%
69 Serbia 3.30% 1.74%
70 Slovakia 3.30% 2.57%
71 Qatar 3.13% 0.99%
72 Kuwait 3.10% 1.12%
73 Montenegro 3.10% 1.59%
74 Belize 3.00% 0.90%
75 Bulgaria 3.00% 1.74%
76 Cambodia 3.00% 1.35%
77 Norway 3.00% 1.73%
78 Mauritania 2.90% 1.57%
79 Senegal 2.90% 1.22%
80 Spain 2.90% 2.51%
81 Croatia 2.80% 1.51%
82 Latvia 2.80% 3.29%
83 Benin 2.70% 1.34%
84 Puerto Rico 2.70% 1.25%
85 Myanmar 2.64% 0.91%
86 Vietnam 2.64% 6.12%
87 South Korea 2.60% 3.79%
88 Panama 2.40% 1.99%
89 Singapore 2.40% 9.04%
90 Luxembourg 2.30% 1.17%
91 Belgium 2.27% 2.36%
92 Ireland 2.20% 1.72%
93 Uganda 2.10% 1.81%
94 Mali 2.00% 1.15%
95 Slovenia 2.00% 2.45%
96 United Kingdom 2.00% 4.95%
97 Cameroon 1.97% 1.88%
98 Finland 1.90% 1.88%
99 Israel 1.90% 1.27%
100 Italy 1.90% 2.17%
101 Jordan 1.84% 1.27%
102 Bosnia and Herzegovina 1.70% 1.37%
103 Denmark 1.60% 1.37%
104 Indonesia 1.52% 2.66%
105 Morocco 1.50% 2.38%
106 Portugal 1.50% 2.37%
107 Costa Rica 1.43% 1.49%
108 Greece 1.40% 1.87%
109 Netherlands 1.40% 3.04%
110 Sweden 1.40% 2.26%
111 Trinidad and Tobago 1.40% 1.17%
112 Bahamas 1.39% 0.91%
113 Oman 1.25% 0.97%
114 France 1.20% 3.34%
115 Brunei 1.10% 0.91%
116 Gabon 0.90% 0.91%
117 Maldives 0.90% 0.94%
118 Hong Kong 0.70% 3.27%
119 Switzerland 0.70% 1.82%
120 Ecuador 0.45% 2.73%
121 Thailand 0.45% 5.20%
122 Saudi Arabia 0.40% 1.30%
123 Malta 0.30% 1.44%
124 Bolivia 0.20% 1.85%
125 Japan 0.20% 1.64%
126 Macau -0.08% 0.90%
127 United Arab Emirates -0.38% 1.54%
128 Rwanda -1.10% 1.45% Quick Analysis
Just from glancing at the table, it is evident that this is not entirely true. Countries with very low inflation rates like Thailand, Hong Kong, The Netherlands and France have seen a lot of crypto adoption, meaning that there is another driver behind it.
At the same time, countries with very high inflation rates (over 50%!!) like Sudan, Lebanon, Syria, Iran and Ethiopia do not appear to have a lot of crypto adoption, despite the price of goods changing annoyingly fast.
I calculated an r-value (linear correlation coefficient) for the data and I got 0.3, which indicates no real statistical correlation. This is also pretty obvious from the graph below. Perhaps it is possible discern different populations in there but its a long-shot with only a couple of hundred points.
So what else is at play?
It looks like there is much more going on for crypto adoption than just using crypto as a hedge against inflation.
Perhaps crypto awareness and education is low in countries like Sudan and Ethiopia and that is why they don't use it? Or perhaps they can hedge against inflation by other means such as using gold, silver or bartering? Perhaps the % of internet users is too low for people to even know about crypto.
However, I suspect this is not the case in places like Iran and Lebanon which are very techy. Or weirdly in sketchy places like Ukraine and Russia, which have seen huge adoption rates without experiencing much inflation...let's please not link this with the dark web or for selling drugs and guns...
So what do you think? What other things are at play in crypto adoption? Looking forward to reading your comments below :)
n.b. Image Creator: PM Images, Copyright: Phil Leo / Michael Denora
Disclaimer: Being a content writer I try to get as much exposure as possible by posting my writings in different platforms. This article was originally posted on publish0x and can be found in this link.
Also, non of the content of this writing is or should be considered financial advise. I am no financial advisor, I am merely a content writer using freely available data to answer some big questions.
