Crypto interest has waned in North America and Europe last year
As crypto prices fell over the past year, so did growth in adoption worldwide, led by slowing transactions in North America and Europe.
While Europe (20.8%) and North America (18.3%) remained the two regions with the largest shares of crypto transactions received in the second quarter, their growth rate has cooled, a new report from crypto firm Chainalysis shows. Their shares of total transaction volume also fell from the previous two quarters.
But Asian countries such as India, Vietnam and the Philippines increased their share of crypto transactions during that time.
The trend has been dictated by decentralized finance (DeFi), according to Chainalysis’ director of research, Kim Grauer, who noted that the report aims to access crypto value beyond prices.
“Yes, we’re going to have to get out of these terrible stock market conditions, but the race right now in North America is for the next killer app,” Grauer told Yahoo Finance. “The money being invested in the space right now is in apps, experiences and users, and we don’t have a clear winner there.”
According to the report, between July 2021 and June 2022, European countries (excluding Eastern Europe) received $1.3 trillion in crypto, surpassing the crypto transaction flows received by other regions. Largely driven by activity in the US, North America came in second for the same period with $1.15 trillion in crypto flows.
In the same period, Europe’s monthly crypto received fell by 24% from $104.8 billion to $79.4 billion in the month, while North America’s fell by 12% from $82.6 billion to $72.1 billion in the month. On the other hand, countries in Central and South Asia as well as Oceania saw a slight increase from $77 billion to $83 billion per month.
For Europe and North America, DeFi accounted for 31% and 37% of total transactions received, respectively.
A widely used term in the crypto world, DeFi includes emerging financial technology that uses blockchains to decentralize goods and services. Theoretically, that includes everything from bills and mortgages to audio files and rideshare apps. Over the past year, that has meant speculative trading in digital assets.
Based on crypto transactions and web traffic, Chainalysis found that decentralized exchanges or DEXs and NFTs stood out as the most important parts of DeFi that drove people to crypto over the past year.
In turn, the crypto transactions received by DeFi projects and protocols in North America also seem to have been hit hardest by the bear market. During the second quarter, crypto flows to centralized exchanges remained net positive in North America, but that was canceled out by DeFi outflows.
“While North America remains the second largest [crypto] market in the world, it has been more exposed to the bear market due to DeFi, and that has caused its growth share of the overall market to plateau,” added Grauer.
She also pointed to crypto adoption in Asian countries such as Vietnam, India, the Philippines and Pakistan – driven in part by people’s interest in less speculative NFTs such as trading card games – to explain how they gained market share.
Christine Moy, Apollo Global Management’s head of digital assets, made a similar point during Yahoo Finance’s All Markets Summit this week.
“I think there’s probably only a small subset of us geeks who are very interested in financialization in general,” Moy said. “The path to wider adoption is something funnier, funnier or funnier. [meme-like]. We will see that over the next few years.”
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David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrency and stock markets. Follow him on Twitter at @DsHollers
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