Global Crypto Investment: Which Country Leads The Pack?

There are many statistics concerning which countries trade the most cryptocurrency, and it is often assumed that South Korea, Japan, or the United States are the biggest investors. However, according to recent data, the country with the highest cryptocurrency adoption is Turkey, with 20% of Turks owning cryptocurrencies to some degree. Other countries with high levels of cryptocurrency adoption include Brazil, Colombia, Argentina, South Africa, and Nigeria. The United States, despite being home to most crypto endeavours and activities, only has 8% of its citizens owning Bitcoin.

The US has the most crypto endeavours and activities

The US currently has the most crypto endeavours and activities. This is evident in the number of exchanges, trading platforms, funds, crypto mining facilities, and blockchain-oriented projects in the country.

The US also has the largest population of any country, and while its citizens are not considered to be the most enthusiastic adopters of cryptocurrencies, 8% of Americans still own Bitcoin, which equates to a large number of people.

The US government has also taken steps to regulate cryptocurrencies. In July 2023, courts ruled that cryptocurrencies are considered securities when purchased by institutional buyers. This means that crypto exchanges are now regulated by the SEC, as are coin offerings or sales to institutional investors. Despite this, crypto is still legal in the US, and its regulatory agencies are slowly gaining more control over the industry.

Many US businesses are also starting to accept Bitcoin as a form of payment. According to one estimate from late 2022, roughly 2,352 US businesses accept Bitcoin, not including Bitcoin ATMs. Big brands are also getting involved, accepting Bitcoin for everything from groceries to airline tickets. Some sports teams are even accepting cryptocurrency and exploring the use of non-fungible tokens (NFTs) to create a more immersive fan experience.

The US has a large number of crypto investors, and this is reflected in the volume of Bitcoin traded against the US dollar. In 2020, approximately 420 million US dollars' worth of Nigerian naira were used to buy Bitcoin, while 400 million US dollars' worth of Russian rubles were used.

With its advanced financial system and large population of investors, the US is likely to remain a leader in crypto endeavours and activities for the foreseeable future.

Romania has a high number of international tech companies

The turnover and teams of the top 50 largest technology companies in Romania have increased four times in the last ten years (2009-2019), according to a Cushman & Wakefield Echinox analysis. They reached a combined turnover of EUR 3 billion and over 50,000 employees in 2019. Most of these companies, such as Amazon, IBM, HP, Microsoft, and Oracle, are also among the largest technology companies globally. The technology sector has become an essential pillar of the Romanian economy, contributing 5.5% to Romania's GDP overall formation in 2019.

Romania has a strong history of innovation in several fields, including aeronautics, medicine, mathematics, computer science/engineering, physics, biophysics, chemistry, biochemistry, and biology. The country has made significant progress in all information and communications technology (ICT) subsectors, including basic telephony, mobile telephony, the internet, and IT.

The ICT industry in Romania has broadened its focus beyond manufacturing equipment to maintenance and management services, as well as creating audio, video, print, and digital content. The country's telecoms sector has been deregulated, expanded, and modernised over the past 15 years. Romania is also aggressively promoting and developing its biotechnology industry, investing hundreds of millions of dollars in infrastructure, research and development, and recruitment.

The success of several local IT companies has contributed to the growth of the sector. For example, UiPath, Romania's first tech unicorn, was founded in 2005 and develops a platform for Enterprise Robotic Process Automation (RPA). In 2022, the company secured USD 153 million in funding and later raised USD 225 million from Sequoia Capital and CapitalG, two of the biggest US venture capital funds. Another successful Romanian company is Bitdefender, founded in 2001, which is now one of the top cybersecurity and anti-virus software companies in the world, serving some 500 million users worldwide.

Romania's capital, Bucharest, is the ninth-largest city in the EU and is home to 46% of the country's IT industry employees. The city ranks as the 7th best tech city in Europe.

China has a large volume of Bitcoin traded daily

China has long been a dominant player in the global Bitcoin market. In 2017, analytics site Bitcoinity estimated that the three largest Chinese bitcoin exchanges, OkCoin, Huobi, and BTCC, accounted for more than 90% of the global bitcoin market on January 11. However, it is important to note that these figures were likely inflated due to the unique fee structure of Chinese exchanges at the time, which did not charge fees on bitcoin trades but instead made money through withdrawal charges.

China's exchanges have reported 98% of the global trading volume, suggesting an immense dominance by its markets. However, it is believed that most of this volume is fake and that the actual figure is closer to 80-85%. This is because Chinese exchanges incentivize traders to increase their trading volume by offering reduced withdrawal fees as their trading volume increases. This has led to traders buying and selling from themselves at zero cost to take advantage of these reduced fees.

Despite this, China still controls a significant portion of the global Bitcoin volume. In 2017, the introduction of trading fees by the major Chinese exchanges caused a sharp decline in trading volume, with a drop of nearly 80% on BTCC and over 50% on OKCoin within the first hour of the new policy. This illustrates the significant impact that the Chinese market has on Bitcoin trading and that even small changes in policy can have a substantial effect on the market.

While China has historically been a major player in the Bitcoin market, it is worth noting that other countries have also seen a surge in demand for crypto. For example, Vietnam has consistently been ranked as one of the countries with the highest rates of crypto adoption, and the Philippines has seen a rapid increase in crypto usage, largely due to the popularity of play-to-earn (P2E) games and NFTs.

Spain has many Bitcoin ATMs

While the United States is considered the country with the highest number of crypto endeavours and activities, Spain is also a significant player in the cryptocurrency market. Spain has a mature financial market and regulations, which means that Bitcoin is regularly bought and sold by its citizens, and investments are relatively protected by contracts with the exchanges overseen by the country's governing body.

Spain has embraced the use of Bitcoin ATMs, with around 80 machines located across the country. These ATMs offer users the convenience of instantly purchasing and selling cryptocurrencies using cash. However, due to the lack of proper identification requirements, these ATMs have also been exploited by criminal syndicates for money laundering.

The presence of Bitcoin ATMs in Spain is part of a larger trend of the country's growing interest in cryptocurrency. A Comision Nacional Del Mercado De Valores (CNMV) study in June 2022 revealed that 6.8% of Spain's population had invested in crypto. This interest in cryptocurrency is further reflected in the variety of exchanges and brokers available to Spanish citizens, including well-known platforms such as eToro and Coinbase.

While Spain has a significant number of Bitcoin ATMs, it is worth noting that these machines are not the only way to acquire or sell cryptocurrencies in the country. Spanish citizens can also utilise online exchanges, brokers, and peer-to-peer transactions to engage in the crypto market.

Japan has a strong regulatory environment for crypto

Japan has a well-defined regulatory framework for blockchain-based tokens and cryptocurrencies. The country has recognised the potential of a digital decentralised ecosystem and played a prominent role in the domains of computer science and cryptography. The Japanese Financial Services Agency (FSA) regulates cryptocurrencies in Japan, working with the Japan Virtual Currency Exchange Association (JVCEA) and the Japan Security Token Offering Association (JSTOA).

The Payment Services Act (PSA) defines and regulates "Crypto Assets", and any person providing Crypto Asset Exchange Services (CAES) must be registered with the FSA. Crypto Asset Custody Services (CACS) are also included in the scope of CAES, and providers of these services must be registered as CAESPs. The JVCEA has established a "Green List System", which exempts certain established crypto assets from the requirement of a JVCEA Pre-Assessment before being handled by a member CAESP.

The Financial Instruments and Exchange Act (FIEA) regulates "security tokens", which represent shares, bonds, or fund interests. It also covers Crypto Asset Derivatives Transactions to protect users and ensure transactions are conducted appropriately. The FIEA also contains prohibitions against unfair acts in Crypto Asset spot transactions and Crypto Asset Derivatives Transactions, such as wrongful acts, dissemination of rumours, and market manipulation.

The Act on the Prevention of Transfer of Criminal Proceeds (APTCP) sets out Anti-Money Laundering (AML) standards for crypto assets, implemented by the Japan Financial Intelligence Center (JAFIC) and the Financial Intelligence Unit (FIU). The FIU, along with the JAFIC, also implements AML standards for crypto assets, which require regulated entities to record and verify customer identities and transactions, report suspicious transactions, and monitor politically exposed persons.

The stability of the yen and Japan's ageing population have been factors in restraining more rapid cryptocurrency growth in the country. However, the introduction of yen-pegged stablecoins has drawn more people to the cryptocurrency market, and Japan's crypto market remains dynamic, with vibrant competition among exchanges and continued investment from established enterprises.

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