Indonesia, Brazil lead cryptocurrency ownership globally as currency devaluation, inflation spur adoption, survey shows

Indonesia and Brazil top global list of 20 markets in cryptocurrency adoption, survey by cryptocurrency exchange Gemini shows

Respondents in countries that have experienced high currency devaluation were more than five times as likely to buy digital tokens, survey shows

3-MIN READ3-MIN

Investors across the world prefer cryptocurrencies such as bitcoin as a hedge against currency devaluation and inflation. Photo: Bloomberg

Published: 4:49pm, 4 Apr 2022Updated: 4:49pm, 4 Apr 2022

Indonesia and Brazil lead the world in the adoption of cryptocurrencies, where investors perceive them as a hedge against currency depreciation and inflation, according to a survey by the US cryptocurrency exchange Gemini.

While bitcoin and other digital tokens are still not accepted as legal tender in most of the 20 markets surveyed globally, their finite supply means that they are still perceived as a more stable store of value than traditional assets, the survey showed.

Some 41 per cent of those surveyed in Indonesia and Brazil owned cryptocurrencies, followed by the United Arab Emirates and Singapore at 35 per cent and 30 per cent, respectively. Hong Kong ranked eighth at 24 per cent.

The global survey of 30,000 individuals, conducted between November and February this year, found that more than half of the cryptocurrency owners in Hong Kong, India and Brazil started dabbling in the asset class since last year, when bitcoin hit a record high of about US$68,900.

Currently, 90 per cent of bitcoin’s limited supply of 21 million is already in circulation. Bitcoin advocates say that it is the cryptocurrency’s finite supply compared with traditional money - whose supplies are subject to central banks’ policies - helped fuel the total market capitalisation of all virtual assets to almost US$3 trillion last year.

“While bitcoin may not be a legal tender in Indonesia, should the value of bitcoin increase with time, this will protect the decreased purchasing power of a currency that results from the loss of its value,” said Feroze Medora, a director of trading at Gemini APAC.

But cryptocurrencies are also extremely volatile. Bitcoin plunged 50 per cent in mid-January to around US$35,075 from a peak of US$68,900 last November. There are also deep problems with links to organised crime and money laundering.