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Insights into cryptocurrency adoption across Europe and America

Overview

This white paper analyses and evaluates the current climate and profitability of cryptocurrency in Europe and North America; namely the United States, United Kingdom, France and Germany.

Cryptocurrency ownership in Europe and North America reached an average of 7.2% in 2020, higher than the global average of 3.1%. An increased cryptocurrency awareness explains the gap – people who have heard of cryptocurrency – from an average of 59.8% in 2018 to 67.7% in 2019; a 13.2% increase. Cryptocurrency awareness is on the rise, rapidly.

Further investigations reveal that 34.8% of cryptocurrency owners in these regions are younger adults; many are under 35, highly educated and affluent. These individuals tend to have a higher propensity to make purchases using cryptocurrency. And in fact, 24.7% of them are already transacting using cryptocurrency.

With increased ownership and interest of cryptocurrency in the regions, businesses should start accepting cryptocurrencies to gain access to a new segment of customers.

Introduction to Cryptocurrency

Cryptocurrency is a digital currency that can be used to purchase goods and services. It uses an online ledger with powerful cryptography to secure online transactions. These transactions are verified, and records are maintained by a decentralised system using cryptography, known as Blockchain.

A Blockchain is a decentralised ledger of all transactions across a peer-to-peer network. Using this technology, businesses can confirm transactions without a need for a central clearing authority. Potential applications include cross-border money transfer, settling trades, voting, and many other activities.1

With 95.75% of the total market capitalisation in 2020, Bitcoin is the dominant cryptocurrency and continues to gain momentum in being recognised as a normalised than a speculative asset.2 In 2019, Chainalysis reportedly estimated that Bitcoin commercial transactions reached roughly US$4 billion. And in 2020, 90% of cryptocurrency payment providers are already offering Bitcoin as payment methods.3,4

Furthermore, a Deutsche Bank’s research conducted in 2020 in the US, UK, Germany, France, and Italy found that a large majority of millennials believe cryptocurrencies will be good for the economy. And they have already brought and sold a cryptocurrency. More than a third of them believe that cryptocurrencies are already replacing cash.5

Chart showing the attitude towards crypto adoption

Global Adoption of Cryptocurrencies

A recent report from the University of Cambridge estimated that there are already 101 million unique crypto-asset users in the third quarter of 2020; compared to just 35 million users in 2018, a 189% increase.6

Comparing the adoption rate of cryptocurrency wallets to the Internet’s adoption rate, we can safely estimate cryptocurrency wallet users to reach 250 million by 2030, if the current trends continue.7

Graph showing growth trend of Bitcoin compared to that of the Internet.

“Adoption rate” is measured by the number of users adopting the Internet and bitcoin since each went public. In this case, the Internet and bitcoin have been public for different lengths of time. The Internet has been around since the 1980s but went public in 1991. Bitcoin was launched in 2009 but became publicly accepted in 2011. Year  1 for the Internet is 1991 and for bitcoin is 2011. To forecast the number of cryptocurrency wallet users, we applied the growth rate of the number of Internet users.

Adoption of Cryptocurrencies Across
Europe and North America

From our research, we found that the average cryptocurrency adoption rate in Europe and North America is 7.2%, more than twice the global average of 3.1%.

Below is an overview of the cryptocurrency adoption in the 4 markets we will be focusing on in this white paper: United States, United Kingdom, France and Germany.

The adoption rate will grow in the next few months, given the increasing awareness and bullish sentiments around cryptocurrencies. In 2018, the ING International Survey estimated cryptocurrency awareness among European and North American markets to be at 59.8%*. In addition, the IE Center for Governance of Change 2019 estimates cryptocurrency awareness to be 67.7%.8

This 13.2% increase in awareness is explained by a rise in cryptocurrency users across all demographics, especially so within these groups: (1) males, (2) younger adults below age 35, (3) highly educated as well as (4) highly affluent. A quarter of cryptocurrency holders in these countries are already purchasing goods and services using cryptocurrency.

High-value cryptocurrency transactions (over USD 1,000) dominated both the European and North American markets, accounting for 48% and 66% of transactions, in contrast to global transaction sizes (38%).

*For reliability of the comparison, the cryptocurrency awareness rates for both studies were gathered from the same countries used in the comparison: (1) USA, (2) UK, (3) France and (4) Germany.

Chart showing Europe domestic and cross border transaction size
Chart showing North America domestic and cross border transaction size

In addition, over 70% of the transaction volume for cryptocurrency exchanges headquartered in Europe and North America were fiat-cryptocurrency transactions.

Chart depicting cryptocurrency transaction breakdown by region.

Cryptocurrency Ownership in America

Key Statistics

It is estimated that 27 million people, 8.3% of America’s total population, currently own cryptocurrency.

Chart showing cryptocurrency awareness in America.

Awareness

In 2018, a survey conducted by ING found that 61% of British residents had heard of cryptocurrency. Comparing this with 2019 survey results from IE CGC, more Britons (71%) have heard of cryptocurrencies. This suggests a growing interest among Britons in purchasing cryptocurrency since 2018.9, 10

Demographics

Breaking down cryptocurrency ownership by income, ownership levels are significantly higher among the very wealthy. Out of the surveyed owners, over 70% of them have an annual income above US$1 million, and 33% of them with income between US$500,000 and US$999,999.

Chart showing cryptocurrency ownership in America according to income.

Majority of the US cryptocurrency owners are in the 18-44 age group (58%). 5% of them are 55 and above. This concludes that cryptocurrencies are largely owned by young, tech-savvy and wealthy Americans.

Chart showing cryptocurrency ownership in America according to age.
Chart showing cryptocurrency ownership in America according to education level.
Chart showing cryptocurrency ownership in America according to gender.

Highly educated Americans are more likely to own cryptocurrencies, 17% of them hold a doctorate education and equivalent, while 9% with a secondary education. On top of that, a higher percentage of American men (16%) own cryptocurrencies than women (7%).

Purpose of Ownership

46% of American cryptocurrency owners are already using cryptocurrency to make purchases, while the rest own cryptocurrency solely for investment purposes.

Chart showing purpose for cryptocurrency ownership in America.

Cryptocurrency Ownership in the
United Kingdom

Key Statistics

It is estimated that 3.3 million people, 4.9% of the United Kingdom’s total population, currently own cryptocurrency.

Chart showing cryptocurrency awareness in United Kingdom.

Awareness

The survey conducted by ING found that 61% of British residents had heard of cryptocurrency. Comparing this with 2019 survey results from IE CGC, more Britons (71%) have heard of cryptocurrencies. This suggests a growing interest among Britons in purchasing cryptocurrency since 2018.

Demographics

Breaking down cryptocurrency ownership by income, ownership levels are higher among the wealthy. 40% of the surveyed Britons who own cryptocurrency have income over £200,000, and 18% of them with income ranging from £100,000 to £200,000.

Chart showing cryptocurrency ownership in United Kingdom 
according to income.

Majority of the United Kingdom’s cryptocurrency owners are in the 18-34 age group (33%). 4% of them are 55 and above. This shows that cryptocurrencies are largely owned by young, tech-savvy and affluent Britons.

Chart showing cryptocurrency ownership in United Kingdom 
according to education level.
Chart showing cryptocurrency ownership in United Kingdom 
according to gender.

Highly educated Britons are more likely to own cryptocurrencies, 21% of them hold a doctorate education and equivalent, while 7% with a secondary education. On top of that, a higher percentage of Briton men (10%) own cryptocurrencies than women (6%).

Purpose of Ownership

42% of Briton cryptocurrency owners are already using cryptocurrency to make purchases, while the rest own cryptocurrency solely for investment purposes.

Chart showing purpose for cryptocurrency ownership in United Kingdom.

Cryptocurrency Ownership in France

Key Statistics

It is estimated that 2.1 million people, 3.3% of France’s total population, currently own cryptocurrency.

Chart showing cryptocurrency awareness in France.

Awareness

50% of French residents had heard of cryptocurrency. Comparing this with 2019 survey results from IE CGC, cryptocurrency awareness among French have increased slightly to 51%. This suggests a growing interest among French in purchasing cryptocurrency since 2018 which varies significantly across age and income.

Demographics

Breaking down cryptocurrency ownership by income, ownership levels are significantly higher among the very wealthy. 67% of the surveyed French have an annual income greater than €300,000, more than twice that of any other income group.

Chart showing cryptocurrency ownership in France 
according to income.

Majority of French cryptocurrency owners are in the 18-34 age group (30%). 4% of them are 55 and above. Cryptocurrencies are largely owned by young, tech-savvy and wealthy French residents.

Chart showing cryptocurrency ownership in France 
according to age.
Chart showing cryptocurrency ownership in France 
according to education level.
Chart showing cryptocurrency ownership in France 
according to gender.

Highly educated French are more likely to own cryptocurrencies, 21% of them hold a doctorate education and equivalent, while 5% with a secondary education. On top of that, a higher percentage of French men (9%) own cryptocurrencies than women (6%).

Purpose of Ownership

59% of French cryptocurrency owners are already using cryptocurrency to make purchases, while the rest own cryptocurrency solely for investment purposes.

Chart showing purpose for cryptocurrency ownership in France.

Cryptocurrency Ownership in Germany

Key Statistics

It is estimated that 2.1 million people, 2.6% of Germany’s total population, currently own cryptocurrency.

Chart showing cryptocurrency awareness in Germany.

Awareness

71% of German residents had heard of cryptocurrency. Comparing this with more recent survey results from 2019, more Germans (80%) have heard of cryptocurrencies. This suggests a growing interest among Germans in purchasing cryptocurrency since 2018.

Demographics

Breaking down cryptocurrency ownership by income, ownership levels are significantly higher among the wealthy. 67% of the surveyed Germans have an annual income over €800,000, 44% of them between €200,000 to €800,000, at least twice that of other income groups.

Chart showing cryptocurrency ownership in Germany
according to income.

Majority of German cryptocurrency owners are in the 18-34 age group (33%). 5% of them are 55 and above. Cryptocurrencies are largely owned by young, tech-savvy and affluent German residents.

Chart showing cryptocurrency ownership in Germany
according to age.
Chart showing cryptocurrency ownership in Germany
according to education level.
Chart showing cryptocurrency ownership in Germany
according to gender.

In Germany, education level does not make a significant impact on cryptocurrency ownership, as 10% of Germans do not hold a degree while 10% of them have a university degree and higher. On top of that, a higher percentage of German men (9%) own cryptocurrencies than women (6%).

Purpose of Ownership

48% of German cryptocurrency owners are already using cryptocurrency to make purchases, while the rest own cryptocurrency solely for investment purposes.

Chart showing purpose for cryptocurrency ownership in Germany.

How can Businesses Leverage
Cryptocurrency Payment?

The payment service provider landscape continues to be dominated in 2020, both in transaction volume and transaction number. Fiat-cryptocurrency transactions make up nearly two-thirds of all volumes (65%) and transactions (63%).  Business-to-business (B2B) and business-to-consumer (B2C) transactions make up 75% of the total transaction volume for cryptocurrency payments globally.

Chart providing a breakdown of cryptocurrency transaction volume based on the type of payments.

For domestic transactions, low-value domestic transactions (below US$100) account for 44%, while high-value domestic transactions (over US$1,000) are less than one third (31%). In contrast, low-value transactions account for only 30% of the total cross-border transactions, whereas higher-value transactions account for 45%.

Chart depicting findings of domestic and cross-border cryptocurrency transaction sizes globally.

Conclusion

From the findings in this white paper, we conclude there is a high level of cryptocurrency ownership in the United States, United Kingdom, France and Germany.

People in the regions have displayed an increased understanding of cryptocurrency. They hold a positive outlook towards the possible widespread adoption of cryptocurrency for day-to-day transactions. Many of these cryptocurrency owners are younger, more educated and affluent.

The cryptocurrency market looks set to be entering a bullish season. In December 2020, Bitcoin values reached a record high of US$27,700. Not just that, huge investment companies and large corporations such as Paypal, Microsoft, AT&T and Revolut entered the cryptocurrency space. Private investors who are billionaires are also investing in Bitcoin heavily. Thus, a rising number of governments have relaxed their regulations on cryptocurrency.

From this widespread of cryptocurrency adoption in today’s world, businesses would benefit by integrating cryptocurrency payment into their payment ecosystem. It is a new opportunity for you to reach new markets, winning new customers.

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