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East Asia Dominates World’s Onchain Crypto Activity, Europe and North America Trail Behind

19/09/2020 by Idelto Editor

Crypto activity continues to flourish worldwide, according to a new cryptocurrency adoption index published by the blockchain intelligence firm Chainalysis. The researchers compile onchain digital currency retail value transferred, onchain crypto deposits, peer-to-peer exchange volume, and other types of methodology.

Chainalysis recently published a new report called the “2020 Geography of Crypto,” a study that examines 154 countries and the flourishing cryptocurrency adoption in these areas. The company created a crypto adoption index from the large list of nation-states and only 12 countries had very little traction compared to the rest.

Nation-states that ranked the lowest in the adoption index include Afghanistan, Algeria, Cape Verde, Chad, Fiji, Laos, Libya, and Mongolia.

The top ten countries are ranked by four individual metrics that are combined to create the official ranking. The top country, as far as onchain value received, onchain retail value received, number of onchain deposits, and peer-to-peer trade volume is the Ukraine.

This country is followed by Russia, Venezuela, China, Kenya, U.S., South Africa, Nigeria, Colombia, and Vietnam respectively. “Cryptocurrency is truly global,” the Chainalysis report notes. “Developing countries have high grassroots cryptocurrency activity,” the study adds.

Chainalysis continues by adding:

Venezuela is an excellent example of what drives cryptocurrency adoption in developing countries and how citizens use [crypto] to mitigate economic instability— Venezuelans use cryptocurrency more when the country’s native fiat currency loses value to inflation.

The study emphasizes that the wealth preservation tactic is leveraged in Africa and East Asia as well. Moreover, peer-to-peer cryptocurrency exchanges are essential to digital currency adoption in developing nations, Chainalysis highlights.

In the section that covers Africa, the blockchain intelligence firm says both remittances and currency devaluation is what’s driving crypto adoption throughout the large continent. The study notes that major cryptocurrency trading platforms now look at Africa as an “opportunity.”

Chainalysis details that in Africa regions like Kenya, Nigeria, and South Africa have been seeing more adoption than other areas throughout the continent. Central & Southern Asia and Oceania (CSAO) is also covered in the Chainalysis study and researchers say growth is “already strong.”

The CSAO area is seeing a number of cryptocurrency regulations adopted within a variety of countries. CSAO is the fifth-most active region worldwide when it comes to cryptocurrency activity and it’s seen over $41 billion sent and $40 billion received during the last 12 months.

East Asia is the world’s largest crypto market, in terms of crypto activity, capturing 31% of all the digital currency transactions in the last year. Crypto addresses stemming from East Asia accounted for $107 billion received.

East Asia’s cumulated data is 77% larger than the crypto activity in Northern and Western Europe. East Asia is dominated by “pro traders” and “stablecoins,” the Chainalysis report highlights. Stablecoin usage in East Asia is “off the charts” in comparison to other regions worldwide.

Eastern Europe has the fourth-largest crypto activity rating globally, and it also contains the top two countries represented in the Chainalysis’ crypto adoption index: Ukraine and Russia. “Eastern Europe shows a strong grassroots-level of cryptocurrency adoption,” Chainalysis notes.

One reason Russia and Ukraine take the cake, as far as cryptocurrency activity is concerned, is because adoption has come “amidst regulatory uncertainty.” For instance, Chainalysis says that Ukraine has zero crypto regulations, but the government just started monitoring crypto activity.

Latin America is smaller in terms of onchain activity, and cryptocurrency adoption is low in contrast to the aforementioned regions. Latin America saw $25 billion in crypto assets sent and $24 billion received in the one-year timeframe.

In any 30-day span, Latin America represents 5% to 9% of the crypto activity aggregate on any given month, Chainalysis emphasizes. Even though Chainalysis says the region is one of the “hottest markets,” it also holds the second-lowest growth rate from the regions the researchers studied.

The crypto forensics firm says the Middle East is a smaller digital currency ecosystem, and the region is the second-smallest worldwide. According to the “2020 Geography of Crypto” study, Turkey captures the most crypto activity in the Middle East. Out of the 154 countries Chainalysis studied, Turkey ranks 29th in the crypto adoption index.

Chainalysis mentions that Turkey is a strong crypto adopter due to the Turkish lira falling in value. The fiat currency crisis was sparked by President Recep Tayyip Erdoğan’s authoritarianism and Turkey’s mountains of private foreign-currency-denominated debt.

Toward the end of the report, Chainalysis touches on North America (the United States & Canada), which captures “conservative buy-and-hold” investors, and institutional investors as well. North America accounted for $52 billion sent and the same value received during the course of the 12-month span.

“North America is the third most active region by cryptocurrency volume moved onchain, just behind Nothern & Western Europe (NWE) and well behind East Asia,” Chainalysis says. Addresses stemming from North America accounted for 14% of all the crypto activity studied during the company’s research.

Chainalysis further notes:

North America also hosts a growing class of institutional investors conducting even larger transfers of cryptocurrency.

Additionally, Chainalysis highlights that a number of the global regions have formed crypto alliances. “North America and Nothern & Western Europe (NWE) form a quasi-common market, plus heavy trade with East Asia,” the “2020 Geography of Crypto” findings detail.

NWE has a “strong professional market” but also a “surprising” amount of illicit activity. As far as crypto activity is concerned, NWE is the second-largest territory behind East Asia. The NWE region accounts for 17% of all the crypto transactions worldwide.

NWE exhibits similar characteristics to North America in terms of institutional and professional traders. However, NWE’s crypto activity is also “largely driven by ransomware and darknet markets.”

The 130-page study shows that crypto adoption and activity has grown exponentially in certain regions. A number of other countries and the regional bureaucrats are just becoming aware of cryptocurrency technology, and are falling behind the eight-ball in comparison.

Today in 2020, East Asia is the crowned king of crypto activity worldwide with NWE following behind the region. The report concludes with an interactive crypto index table that shows all 154 countries’ Chainalysis studied during the year.

What do you think about East Asia’s crypto dominance and the “2020 Geography of Crypto” study? Let us know what you think in the comments section below.

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Report: Market Valuation of 14 Banking Giants Shed $635 Billion This Year

16/09/2020 by Idelto Editor

The world’s largest banks lost a considerable amount of market valuation amid the Covid-19 pandemic, according to a new report that estimates financial incumbents lost $635 billion. Between December 2019 and August 2020, the market caps of 14 major banking institutions lost upwards of 30-50% during the time period.

A newly published report written by Buyshares and the researcher Justinas Baltrusaitis, shows that during the first half of 2020, the world’s banks lost a considerable amount of market capitalization. Buyshares data shows that 14 select “major global banks” lost a combined total of $635.33 billion in market capitalization this year.

The biggest loser was Wells Fargo, which lost roughly -56.26% during the time period. Spain’s Banco Santander came in second place, losing -46.16% of its aggregate valuation.

Stats show that while Japan-based Mizuho Financial Group only lost 11%, the American bank, JP Morgan Chase saw a -30.16% drop in value in H1. The major losses from all 14 banks worldwide were significant drops, the Buyshares report highlights.

But researchers also stress that it “could have been much worse if there was no intervention from central banks.” Financial incumbents curbed disaster by receiving massive stimulus from the Federal Reserve. Additionally, the research says that regulators easing restrictions on liquidity, reserves, and capital “proved beneficial.”

Data shows that American banks took the largest hits, but JP Morgan Chase still has a decent market cap ($305.44 billion) today. Chinese banks followed American banks and both groups saw the biggest losses in February, as the start of the pandemic began to shake markets.

Meanwhile, the American banking cartel and the nation’s wealthiest 1% have been accused of fleecing $50 trillion from the bottom 99% during the last few decades. The accusation stems from a working paper written by Kathryn Edwards and Carter C. Price from the RAND Corporation called “Trends in Income.”

According to Price and Edwards calculations, during the course of four decades between 1975 through 2018, the estimate was around $47 trillion at the end of the year. The estimate crossed the $50 trillion zone in early 2020 and the disparity grew by $2.5 trillion per year.

The wealth disparity has stemmed from America’s political class (bureaucrats), a few generational demographics (statists), and the modern-day money changers (U.S. banks and the Fed).

Robert Kiyosaki, the author of the best-selling book “Rich Dad, Poor Dad,” recently tweeted about the wealth inequality and said crypto-assets like bitcoin will help younger generations improve the situation.

“Boomers had it easy,” Kiyosaki said. “Plenty of jobs-low cost real estate-rising stock market. Millennials have it hard. 9/11, 2008 real estate crash, [and] now Covid-19. Good news. Millennials [are] tech-savvy. Boomers [are] not. Bitcoin-block chain-digital currencies give millennials head start into the future.”

At press time, the market capitalization of all 7,600+ digital currencies is around $336 billion. The 14 banks that lost market cap saw losses close to 2x the size of the crypto economy. Still, JP Morgan Chase’s valuation is just a touch less than the crypto economy’s entire market capitalization.

Despite the banker’s losses, not many people on social media and forums (if any at all) are too concerned with the world’s megabanks after they have been given a lifeline of dollars from the Fed.

What do you think about the 14 banks losing $635 billion in market cap in 2020? Let us know what you think about this subject in the comments section below.

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Report: Russia Remains a ‘Key Market for Crypto,’ Commands the 3rd Largest Bitcoin Hashrate in the World

27/08/2020 by Idelto Editor

The fervor for cryptocurrency assets in Russia has grown wild over the last few years. This week Xangle Research published a comprehensive report about digital currencies and the Russian environment in 2020. The study’s findings show that Russia is one of the world’s key players when it comes to the crypto economy, but finding reliable information about the subject is “not very easy to find,” researchers stress.

It’s safe to say that Russia is one of the regions in the world where cryptocurrency adoption is booming, but it’s hard to verify the regulatory climate in the area.

A recently published study from Xangle Research explains that the country is a hotbed for crypto in 2020. The research also quotes Binance CEO, Changpeng Zhao (CZ) who has said: “Russia is our key market, one of the most active markets in the global blockchain space.”

The Xangle Research report is a comprehensive look at the crypto economy’s relationship with Russia this year, and the author also highlights that the region is a “key market for crypto.”

Two of the biggest sectors in Russia that currently fuels the crypto environment is mining and trading. Demand for crypto trading is high,” Xangle’s report notes.

“Russia [also] owns the [third] biggest BTC mining power (hashrate) in the world: 6.9% comes from Russia as of April 2020, according to Cbeci.org,” the study highlights.

Additionally, the 2020 crypto report covering the country says a “large portion of the traffic to major crypto exchanges come from Russia.” Xangle’s stats show that Binance captures most of the Russian traffic and the trading platform is followed by Coinbase, Bithumb, and Kraken respectively.

“Crypto derivatives exchanges are also very popular in Russia,” the study reveals, disclosing the two most popular platforms include Bitmex, and Bybit.

Digital currency exchanges that offer ruble fiat on-ramps have some of the highest Russian internet traffic.

Trading platforms such as Binance, Okex, and P2pb2b have RUB as a fiat-on-ramp, and some of the top sources of traffic as well. Despite the large internet traffic, the ruble is “not actively used in trading” as it only represents a market share of “less than 0.3%.”

The Xangle Research report also mentions some of the regulatory climate in Russia concerning digital currencies. The study discusses the recent law that will come into force on January 1, 2021 signed by Vladimir Putin, which gives legal status to cryptocurrency.

Further, the report also mentions how the largest bank in Russia, Sberbank, is considering the creation of a stablecoin.

“We probably may issue a stablecoin on the basis of the law that has been adopted recently. As we can peg this stablecoin to the ruble, this token could become a basis or an instrument for settlements involving other digital financial assets,” Sergey Popov, the director of transaction business at Sberbank told the media this year.

Despite the law’s crypto recognition, Xangle researchers highlight that the cryptocurrency law Putin signed still prohibits the use of crypto as a means of payment in Russia.

Among a number of luminaries, experts, and politicians quoted in Xangle’s 17-page study, the authors also quote Putin’s recent statements.

“The Central Bank of the Russian Federation considers cryptocurrency neither a means of payment nor a store of value,” the Russian President’s statement says at the end of Xangle’s Russian crypto study. “Cryptocurrency is not backed by anything. One should treat it cautiously, carefully,” Putin stressed.

What do you think about the Xangle Research report called “Crypto Asset Market: Russia in 2020?” Let us know what you think in the comments section below.

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China’s Bitcoin Mining Industry Impacted the Most This Year, Says Report

20/08/2020 by Idelto Editor

The researchers and analysts from Tokeninsight published it’s “2020 Q2 Cryptocurrency Mining Industry Report” which shows the industry has grown exponentially during the last six months. The findings indicate cryptocurrency mining has expanded a great deal but China’s bitcoin mines “suffered a great impact” in H1.

Tokeninsight published its “2020 Q2 Cryptocurrency Mining Industry Report” and the study shows a lot has happened in the bitcoin mining industry during the first half of 2020.

The new research paper discusses a number of topics that affected the bitcoin mining industry this year and the countries that are welcoming these operations. For instance, Tokeninsight highlights that the Uzbekistan government established a “national mining pool” in January.

After that announcement, Quebec’s Hydropower Agency of Canada allowed bitcoin miners to obtain 300MW of electricity.

In February the Ukraine government said bitcoin mining “does not require government supervision and intervention.” The following month, Missoula County, Montana, created new regulations for bitcoin miners.

In May, The Acting Minister of Energy of Ukraine told the public bitcoin miners might be able to draw nuclear energy. In April, the local government officials in Sichuan approved the “Hydropower Consumption Demonstration Enterprises.”

News.Bitcoin.com recently reported on the second-batch of consumption enterprises approved in Sichuan. In June, the Parliament of Kyrgyzstan said it plans to “tax and supervise digital asset miners.”

Tokeninsight said that China has been the hardest hit in 2020 as the country has seen a significant impact from a variety of reasons.

The Tokeninsight researchers mentioned that Covid-19 caused mining rig shipment delays, the bitcoin halving cut revenue in half for Chinese miners, internal disputes from mining machine manufacturers like Canaan and Bitmain, and the report also mentions mining policy changes in Sichuan.

Moreover, Tokeninsight has noticed a trend of new players entering the bitcoin mining rig manufacturing sector.

“In terms of the mining machine manufacturing sector, new players are eager to enter the field, and the old overlords are also trying their best to update the technology to manufacture leading products in the market,” the paper notes. “In the first half of 2020, new generation mining machines including Bitmain’s S19 and S19 Pro, WhatsMiner M30 series, and Canaan’s A1146 Pro and A1166 Pro have been launched one after another.”

The report further adds:

From the data published by several manufacturers, the new generation of mining machines has been greatly optimized and improved in terms of performance and power consumption.

The study says that the core competition between mining rig manufacturers is semiconductor research and development (R&D).

A number of mining rig manufacturers leverage 10-7nm chips and the Tokeninsight researchers highlight that chips will improve in the coming years.

“At the current chip research and development level, Samsung and TSMC have deployed 3nm chips, and both plan to mass produce 3nm in 2022,” the paper explains. “Although 3nm is said to be a node approaching the physical limit, TSMC has already planned for 2nm and is conducting research and development with mass production in 2024.”

“Mining hardware is facing an accelerated iteration period, and the field of AI chips will become a battleground,” the Tokeninsight researchers add.

In addition to the problems with Covid-19, supply chain delays, and government rules, China’s bitcoin mining industry is feeling the pressure from the 2020 monsoon season in Asia. Excessive flooding in Sichuan during the last five days caused 20% hashrate losses for a number of Chinese bitcoin mining operations on Tuesday, August 18.

What do you think about Tokeninsight’s Q2 mining report? Let us know what you think in the comments below.

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Report: Bitcoin Untied from the Economic Cycle, ‘Largely Uncorrelated to Other Asset Classes’

19/08/2020 by Idelto Editor

On Tuesday, Coinshares Investment strategist James Butterfill published a report which shows that bitcoin is a unique asset, but is “largely uncorrelated to other asset classes” like commodities and traditional stocks.

Coinshares Investment strategist James Butterfill published a new report on August 18 that shows bitcoin (BTC) is establishing itself as an investment store of value. Butterfill’s report notes that BTC is “less correlated to the economic cycle” and the crypto asset is uncorrelated to other asset classes in the investment world.

One of the trends highlighted is how investors holding BTC for one year or longer jumped from 30% in 2012 to 60% in 2020. Butterfill writes that Coinshares researchers “believe this trend of investor participation is likely to continue.”

“Since its creation following the financial crash in 2008, Bitcoin has seen meteoric – and volatile – growth,” the Coinshares report called “Bitcoin – In a Class of its Own” states.

“Many attempts have been made at boxing in bitcoin into the pre-existing frameworks of current asset classes, but due to its unique collection of similar yet often non-overlapping attributes, it never quite fits any established mould.”

Butterfill’s report adds:

Bitcoin perception is changing over time, its image as a money-laundering vehicle has subsided, with investors now taking a much keener interest in it. News story counts of potential money laundering were much more prevalent in 2013-14 but have since subsided, while counts of Bitcoin as an investment have become more of a focus.

Butterfill details that during the early days (growth phase), BTC behaved much like a tech stock, but going forward researchers at Coinshares think “bitcoin will act more like a store of value (SoV).” However, Butterfill’s report recognizes that in contrast to SoVs like gold and other precious metals, BTC offers other beneficial functions.

The Coinshares Investment strategist pointed to the fact that the crypto asset offers programmable money functionality, the securitization of digital ownership, and traceable recordkeeping with immutability.

On Tuesday morning (Eastern Standard) the price of bitcoin (BTC) touched a high of $12,473 before plummeting to a low of $11,800 temporarily. Crypto traders are still bullish after the recent -5.3% dump and many expected the drop to happen prior to its fall.

Bitcoin has performed much differently than precious metals markets and traditional equities. The Standard & Poor’s 500-stock index (S&P 500) has jumped over 50% since the mid-March market rout, otherwise known as ‘Black Thursday.’ This week the S&P 500 touched its first all-time intraday high in the last six months.

Despite equities and the S&P 500’s recent performance, Coinshares does “not believe bitcoin fits any currently established asset class moulds.”

“Because of its characteristics (scarcity, liquidity, high uptime), evidence suggests investors are increasingly using it as a store of value,” Butterfill’s report concluded. “This has started a self-reinforcing process of financialisation which we believe will lead to increasing use as a store of value.”

What do you think about the assessment from Coinshares Investment strategist? Let us know what you think in the comments section below.

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