In 2024, global cryptocurrency activity continues to grow, with developing economies leading in crypto ownership.

Adoption of the new asset class is increasing worldwide, driven in part by the launch of bitcoin and ether exchange-traded funds (ETFs) in the US, which has boosted adoption, particularly in institutional transfers and higher-income regions.

However, regulatory concerns remain a key obstacle, especially in the US and UK, though Europe is taking steps to address these challenges with the Markets in Crypto-Assets (MiCA) regulation.

Global crypto activity on the rise

Global crypto activity has continued to rise this year despite market volatility. Between Q4 2023 and Q1 2024, the total value of global crypto activity rose substantially, reaching higher levels than those of 2021 during the crypto bull market, data from Chainalysis show.

The report says that while growth in crypto adoption was driven primarily by lower-middle income countries in 2023, this year has seen growth across countries of all income levels, supported by positive developments.

Chainalysis’ findings echo those of a new Triple A Technologies research. According to the “State of Cryptocurrency Ownership Worldwide in 2024″ report, the global user base of digital currencies has reached 562 million people this year, up 34% increase from 420 million in 2023. This figure suggests that 6.8% of the world’s population are now crypto owners, with crypto ownership rising by a compound annual growth rate (CAGR) of 99% between 2018 and 2023.

Central and Southern Asia and Oceania dominates crypto adoption

This year, adoption of cryptocurrencies has been the strongest in Central and Southern Asia, along with Oceania (CSAO). The region dominates Chainalysis’s “2024 Global Crypto Adoption Index”, with seven of the top 20 countries located in CSAO. These countries are India (#1), Indonesia (#3), Vietnam (#5), the Philippines (#8) Pakistan (#9), Thailand (#16) and Cambodia (#17), all of which have demonstrated strong activity in both cryptocurrency trading and decentralized finance (DeFi) between 2023 and 2024.

The Global Crypto Adoption Index is based on four sub-indexes, each measuring different aspects of cryptocurrency usage. It ranks a total of 151 countries based on factors like transaction volume, population size, and purchasing power.

Developing economies lead crypto ownership

Developing economies currently lead in crypto adoption, with the United Arab Emirates (UAE), Singapore (24.4%), Turkey (19.3%), Argentina (18.9%), Thailand (17.6%) and Brazil (17.5%) showing the high levels of crypto ownership, according to Gemini’s 2024 “Global State of Crypto” report.

The high penetration of cryptocurrencies in developing economies is often due to limited access to traditional banking, high remittance costs, inflation, and currency instability. These digital assets offer an attractive alternative for saving, transferring money, and accessing financial services, especially in regions with weak financial infrastructure. Additionally, the younger, tech-savvy population in these countries is more open to adopting new digital solutions.

ETF brings growth through accessibility

The launch of spot bitcoin and ether ETFs in the US in January and July 2024, respectively, has been among the key drivers of increased crypto adoption this year. According to the Chainalysis report, the development marked a significant milestone for the broader crypto industry, and spurred significant growth in crypto activity across all regions, particularly in institutional-sized transfers and in higher-income regions like North America and Western Europe.

In the US, 37% of cryptocurrency owners surveyed by Gemini in 2024 reported holding some of their crypto through an ETF, underscoring the role of these instruments in driving growth within the sector. Notably, 13% of respondents said they own crypto exclusively through an ETF, indicating that many investors entered the market via ETFs when they were introduced this year.

The introduction of spot bitcoin ETFs earlier in 2024 generated considerable enthusiasm. Within the first month of trading, daily trading volume totaled nearly US$8 billion, marking a 63.8% increase from the previous peak of US$4.7 billion on January 11, 2024, the first day of trading, and reflecting strong interest from investors in this new asset class.

Investors remain bullish on crypto

This year, consumer attitudes around crypto has remained positive among owners and past owners. According to the Gemini survey, 57% of current crypto owners feel comfortable making crypto a significant part of their investment portfolios. Furthermore, 27% of past crypto owners expressed similar sentiments, indicating that many may re-enter the market.

Institutional investors are also showing increasing interest in digital assets. A study by EY-Parthenon found that 94% of the 277 institutional investor decision-makers surveyed believe in the long-term value of blockchain and digital assets, with 79% considering them crucial for portfolio diversification.

Additionally, 38% of these respondents said they had already committed between 1%-5% of funds to digital assets or crypto-related investments, and in the case of family offices, nearly half are in that allocation range. Traditional hedge funds are reaching for digital assets gains even more aggressively than their peers, with 22% allocating greater than 5% of funds.

Regulatory concerns as a barrier

Despite increased crypto activity and rising adoption among both retail and institutional investors, regulatory concerns remain a significant barrier.

In 2024, a higher percentage of respondents in the US, UK, and Singapore cited regulatory uncertainty as a key obstacle to investing in cryptocurrencies compared to 2022, according to the Gemini survey.

These results align with the findings of the EY-Parthenon survey which found that while half of firms are interested in investing in tokenized assets, 28% don’t plan to invest until 2026 or later, and 30% are waiting for regulatory clarification before moving forward.

The European Union (EU) has taken a major step toward addressing these concerns, approving in June 2023 the MiCA regulation. MiCA, set to be applicable from December 30, 2024, will introduce uniform market rules for crypto-assets across the EU, providing a more robust and transparent legal framework that is expected to foster further crypto adoption and investment in Europe.

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