So how is crypto performing following the price bubble of everything burst which started in 2022 and has already wiped out over 30 trillion dollars off the value of stocks, cryptos, bonds, and real estate,
The boom-bust cycle has been particularly acute, courtesy of central bank policy, which transitioned from the greatest monetary easing experiment to inflation-fighting tightening.
“The boom-bust cycle has been particularly acute, courtesy of central bank policy”
WIN INVESTING
How has crypto performed under erratic central bank policy?
Central bank tightening in 2022 was the pin that burst all asset prices. Stock and bonds shed more than 30 trillion dollars in 2022.
So crypto, a highly volatile technology asset, was not immune to the 2022 asset price crash.
Crypto market capitalization peaked at 2.67 trillion US dollars in April 2022 and today is holding at approximately one trillion US dollars, at the time of writing this piece.
So crypto has survived the 2022 bloodbath bubble burst, and charting prices over a long-term time frame, pioneering adopters continue to do well.
“crypto, a highly volatile technology asset, was not immune to the 2022 asset price crash”
WIN INVESTING
Crypto adoption as an asset class
Countries with higher levels of crypto investment tend to have lower levels of wealth on average.
Moreover, where you live, investors have wildly different preferences when deciding to choose asset classes.
For example, in the European Union, one of the regions dealing with faster crypto adoption, attitudes towards investing can vary considerably.
The graphic from Gilbert Fontana looks at crypto popularity amongst investors in the EU. It compares exposure to cryptocurrencies relative to stocks, funds, and bonds.
So despite the public awareness of cryptos, there are still discrepancies between the level of investment crypto receives amongst European Union nations.
Slovenia is at the top of the list with 18% of the country’s population investing in blockchain technology. Slovenia is also considered the most crypto-friendly nation in the world.
Cyprus, impacted by 2013 bank bail-ins, ranked high in its crypto adoption, with 13% of the country invested in cryptocurrencies.
“El Salvador became the first country in the world to use Bitcoin, the largest cryptocurrency by market capitalization, as legal tender” – Win Investing
Luxembourg, despite having a small population of 640,000, also has a strong reputation as a global financial hub. Luxembourg has 14% of the population owns or has owned the asset, relative to 36% for stocks, bonds, or funds.
At the “bottom” of crypto interest are France, Germany, and Italy, also the EU’s largest economies. So this could suggest that citizens of Europe with strong economies invest less in crypto.
Put another way, wealthier and more developed EU nations have less adoption of crypto. So as Germany deindustrialized and is unable to compete globally without Russian energy, where will the wealth go?
What about crypto friendliness, crypto as a medium of exchange?
El Salvador became the first country in the world to use Bitcoin, the largest cryptocurrency by market capitalization, as legal tender.
Today, Bitcoin already operates as a medium of exchange across the world.
Currently, most developed countries such as the U.S., Canada, and the UK allow Bitcoin as legal tender.
But several countries, including China and Saudi Arabia, have made it illegal to use Bitcoin.
A recent study undertaken by Fast Private Jet, an Italy-based business aviation company, revealed that Slovenia is the top-friendly cryptocurrency country in the world.
Slovenia, the Czech Republic, and Argentina ranked 1st, 2nd, and 3rd, respectively, in terms of crypto-friendliness. Spain ranked 4th, followed by Japan and Colombia, according to The Times of India,
Across the Atlantic in the US where crypto was launched
New York has numerous options, such as shops and restaurants to spend on cryptocurrencies, making it one of the most crypto-friendly cities in the US. In terms of US cities with the most crypto-friendly communities, Los Angeles ranked 2nd, and San Francisco ranked 3rd.
“Africa is one of the fastest-growing crypto markets in the world” – Win Investing
Least crypto-friendly countries
China, Oman, Egypt, Qatar, Algeria, Iraq, Morocco, Tunisia, and Bangladesh are the least crypto-friendly countries.
These countries have outlawed cryptocurrencies for different reasons.
But as noted above, Slovenia’s capital, Ljubljana, is the most crypto-friendly city in Europe. The city of Ljubljana alone has more than 137 companies and 584 different locations that accept crypto assets. The Slovene government allows crypto payments in 72 shops and 33 sports venues. In honor of Bitcoin, Slovenia’s largest shopping center is called BTC.
Prague was the second most crypto-friendly destination in the Czech Republic. Paralelni Polis is one of the city’s major crypto-friendly attractions.
Madrid, the capital of Spain, is the 3rd most crypto-friendly destination in Europe. The Spanish government implemented crypto regulation in 2021. With their cryptocurrency, Spaniards can buy gift cards online and in-store at apparel shops and electronics, such as Netflix subscription gift cards and Amazon gift cards. Malta has been ranked as the least crypto-friendly country in Europe.
Malta has no cryptocurrency regulations. To provide a more comprehensive analysis of the most crypto-friendly countries in the world, The Times of India noted that the survey also listed countries with the most crypto ATMs in the world.
Crypto adoption is quietly thriving in Africa
Africa is one of the fastest-growing crypto markets in the world, according to Chainalysis, but remains the smallest, with crypto transactions.
Peer-to-peer transactions are more common in Sub-Saharan Africa than anywhere else in the world. At about 6% of all crypto transaction volume, Africa’s peer-to-peer transactions dwarf those of Central and Southern Asia and Oceania, the region with the second-highest volumes in that category.
In conclusion, crypto has survived the 2022 asset price crash, with several continents adopting cryptos as an asset and a medium of exchange.
Africa’s rapid economic growth and sizable young population mean crypto has more growth potential in Africa.
European wealthy have yet to invest on mass in the technology blockchain application of cryptocurrencies.
Given the above, crypto has the potential to emerge from above the clouds into bright skies.
