Cryptocurrency: The Cause Of, Or Solution To, All of Life's Problems

By Graham Cooke

Cryptocurrency is, depending on who you listen to, either the future of finance or a fool’s game. Even among the die-hard fans, you will find a mix of opinions as to whether it is a good investment at any given time. This is largely due to the wild price fluctuations within the market.

In the last twelve months alone, the price of Bitcoin has ping-ponged from an all-time high of around $63,000 in April 2021 to a low of $30,000 in July, before rising again to a new all-time high of around $69,000 in November, and falling back to around $37,000 today.

Positivity

At Finder, we wanted to look at differing attitudes to cryptocurrency as an investment around the globe. To do this, we built on top of our existing Cryptocurrency Adoption Index which surveys internet users in 27 different countries on a quarterly basis. In the most recent survey, we asked a simple question - “Do you think cryptocurrency is a good investment?”

URL: https://datawrapper.dwcdn.net/QOghX/3/

The results vary hugely from country to country. Nigeria leads the pack with 87% of respondents thinking cryptocurrency is a good investment. Venezuela (81%), Ghana (78%), Kenya (77%) and the Philippines (73%) round out the top five. At the opposite end, we have Germany with only 17% positivity, followed by Sweden (18%), Norway (20%), and the UK, Japan and Canada (all on 24%).

Income

It seems at first glance that the more affluent a country is, the less likely it is to trust cryptocurrency investment. In order to understand what metrics could be used to predict a country’s attitude to cryptocurrency, we compared these results to the 2018 World Bank average per-capita income in each country (the most complete recent data set) and found a clear pattern.

All of the top 14 countries had average incomes below $10,000 (bar Venezuela, where no recent data is available). The bottom 13 countries all had average incomes above $30,000 bar Russia ($8,759) and Hong Kong (no data). The higher the average income, the less likely a country is to think cryptocurrency is a wise investment.

Corruption

Next, we decided to compare our results to the Corruption Perceptions Index (CPI), a project from Transparency International which measures governments by their perceived levels of public sector corruption. Each country is scored between 0 and 100, with a lower score indicating more corruption, and a higher score indicating clean and transparent government policy.

Interestingly, all of the top 14 countries bar one received a CPI score of under 50 - with Malaysia creeping in at 51. All of the bottom 13 countries bar one received a CPI score of over 72 - with Russia the pariah at 30. The following table is sortable by investment positivity, per capita income, and CPI.

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There is a strong correlation between cryptocurrency investment enthusiasm and government corruption. The cause of this could be open to as much interpretation as the debate on the value of cryptocurrency itself.

Conclusion

One take is that cryptocurrency is being seen as a valuable alternative way to transact, in regions where trust in government and the local financial system is at rock-bottom - allowing citizens to avoid extortionate banking fees, and relatives overseas to send remittances home with far less trimmed off the top.

A recent study by PYMNTS and the Stellar Development Foundation found “significant” interest in adopting crypto remittances, with almost 1 in 4 respondents who made online payments to friends or family in other countries using cryptocurrency.

It would also be possible to say that this indicates that cryptocurrency is more likely to be favoured in countries with high corruption because it facilitates corruption - allowing criminal gangs to transact and scammers to scam away from the eyes of regulated financial channels.

Blockchain analysis firm Whitestream, for example, released a report last year highlighting the prevalence of crypto scams in Nigeria, claiming that “Lagos is a central focal point in Africa for investor scams of this kind.”

Your interpretation may be down to your overall view on cryptocurrency, or - by extension, financial regulation. Either way, it is clear that while cryptocurrency is becoming something of a target of ridicule in western countries, there is still much enthusiasm for the technology around the world and is likely to be with us for a long time to come.

Methodology: The surveys were conducted in conjunction with Google in all regions bar Australia, where the Qualtrics platform was used. Sample sizes varied from 1,500 to 2,500 depending on population. Further details on methodology can be found on our website.

Graham Cooke, Head of Consumer Research at Finder.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.