• Emerging markets leading in crypto adoption
• Utility is the driving force in emerging markets
• Speculation remains a driving force in developed markets

Believers in crypto have been upbeat following Bitcoin’s extremely bullish tendencies during the last weeks after the long 2018 crypto winter. Emerging markets seem to win the race adoption as opinion rages on whether it’s a fundamental growth or the result of speculation.

Practical purposes as opposed to speculation

This emerging trend was highlighted in a recent tweet by San Francisco-based investment firm Passport Capital who superimposed the levels of trading volumes in the developed and developing markets to reveal the surprise findings.

The findings by Passport capital seem to suggest that a larger volume of the traded Bitcoin volume in the emerging markets is for practical purposes as opposed to speculation. By being used as an alternative currency in developing nations, Bitcoin is therefore keeping with Satoshi’s original vision of being an alternative decentralized financial system.

Utility with BTC

The citizens of emerging markets where the local fiat currencies are unstable and less user friendly are therefore seeing more utility with BTC. Russia, Venezuela, China, Nigeria, and Columbia are among the five countries that are contributing up to 80 percent of the volume being traded in emerging markets with every country having its own catalyst for enhanced Bitcoin adoption that includes currency devaluation, strict regulations and the absence of an alternative for international remittance.

In developed markets also known as the first world Bitcoin transactions seem to follow closely with the price, which is very much related to speculative trading. ‘Fear of Missing out’ (FOMO) grips the crypto community any time the price of Bitcoin rises, driving more investors into the market, pumping the volume and pushing prices higher. Many such investors are known to pull out of the market when the market cools, driving the volume and prices down.  

Real adoption is the catalyst

Bitcoin’s price plunged from a high of $20,000 in December 2017 to the low of $3,000 in December 2018 but the number of active crypto users has actually doubled, according to estimates by Cambridge’s Global Cryptoasset Benchmarking Study. Much of this growth is happening in countries undergoing severe monetary turmoil such as Venezuela. It may appear therefore that emerging markets may end up becoming the next driving force for Bitcoin recovery. Unlike previous years where price gains have been driven by speculation, this time real adoption is the catalyst, something that is likely to be healthier and more sustainable.