2021 was a big year for mass crypto adoption – and no, we don’t mean El Salvador. As thousands of people quit their jobs to play NFT games, corporations such as Adidas and PwC joined the virtual real estate rush, and major payment processors like CoinsPaid saw a 340% rise in volumes, crypto is closer than ever to becoming mainstream.
Global Adoption Index up by 880%
According to Chainalisys, global crypto adoption surged by 880% between October 2020 and October 2021. This isn’t the same as the number of users, though: the Global Crypto Adoption Index is calculated based on retail transaction volume and P2P trading activity weighted by the pro-capita purchasing power. This allowed the analysts to identify the countries where real adoption is high, even if the average income is low, with the leaders being Vietnam, India, and Pakistan.
Interestingly, El Salvador is nowhere to be seen in the top-20, even though many hailed it as the new global crypto hub after it made Bitcoin legal tender last summer. In spite of the installation of hundreds of crypto ATMs and continuing BTC purchases by the state (which somehow always seem to come just before a major price dump), there is no indication that regular Salvadoreans use Bitcoin that much.
At the same time, El Salvador provides a good foothold for western crypto businesses wishing to enter the markets of other Latin American countries from Chainalisys’ top 20, such as Venezuela, Argentina, Colombia, and Brazil. One of the first to use this opportunity is CoinsPaid, the world’s second-largest crypto payment provider. The EU-licensed company recently registered a new business entity in El Salvador in preparation for its 2022 expansion to Latin America.
Crypto payment volume up 340%, according to CoinsPaid
Retail payment volume[1] [2] [3] is arguably a better adoption metric than exchange trading volume or the overall transactions, which are skewed towards institutions and market makers. That’s why it’s important to study the volumes handled by major cryptocurrency gateways, such as CoinsPaid or Coinbase Pro, which facilitate purchases on sites that accept Bitcoin.
On January 1, CoinsPaid reported the final numbers for 2021, with the overall volume growing by an impressive 340% year-on-year to reach 5.5 billion euro. At the same time, the number of transactions increased by 170%, meaning that the average payment size doubled. Also in 2021, the monthly number of transactions crossed the 1 million mark for the first time.
Also in 2021, CoinsPaid became one of the first large crypto processor to issue its own token, $CPD, and a suite of DeFi tools aimed at the merchants using the gateway. The CPD IDO was the first to run on three blockchains at the same time (Ethereum, BSC, and Polygon), and it also featured the largest-ever DEX liquidity upon TGE (Token Generation Event): $1.6 million. Since the IDO, the price of $CPD rose by over 300% by December 2021 – and is still trading 50% above the IDO price even after the market-wide correction.
Staking $CPD allows merchants to obtain discounts of up to 50% on CoinsPaid processing fees. The platform also operates a yield farming program for regular CPD holders.
In the coming months, CoinsPaid plans to list $CPD on several popular centralized exchanges and to launch a large-scale token marketing campaign, targeting regions such as Latin America, Turkey, Vietnam, and the CIS. The company’s example shows that Bitcoin payments and DeFi can be bridged, and it will be interesting to see if other large processors follow CoinsPaid’s example in 2022.
P2E gaming income replaces salaries in the Philippines
Philippines is only no.15 in Chainalisys’ rankings, but this country became the hotspot for the arguably biggest blockchain trend of 2021: play-to-earn gaming. Axie Infinity, an NFT-based game created by the Vietnamese tech billionaire Trung Nguyen, provided a new source of income for dozens of thousands of Filipinos who were hit hard by the pandemic.
When the prices of AXS and SLP (the main Axie in-game currency) were at their all-time highs in summer 2021, successful players earned double the average monthly salary by playing only an hour or two a day, and some even bought houses with the rewards. Many became ‘sponsors’, helping new players buy into the game in exchange for a 50% cut of their earnings.
As the token prices declined in fall, the average daily earnings in Axie Infinity fell below the minimum wage level, but the play-to-earn (P2E) is now much bigger than Axie. As new players flock to Gods Unchained, Aavegotchi, Splinterlands, and other games, it’s clear that P2E has become one of the biggest mass adoption drivers.
PwC and Adidas buy land in the metaverse
The metaverse is a parallel virtual reality where users can spend leisure time, shop, and communicate using avatars. In theory, there should be just one metaverse, but dozens of blockchain-based games and virtual worlds call themselves metaverses, including Decentraland, The Sandbox, and even Axie Infinity.
All these platforms sell parcels of virtual land, which can be monetized by building new experiences on them, leasing, advertising, etc. For example, a company can open a virtual store and sell NFTs representing ‘digital twins’ of its real-world products. A single parcel costs between $10,000 and $100,000, with the record being $4.3 million.
Monetizing land in the metaverse is a novel way to make money and attract customers in the digital space. Consultancy giant PwC Hong Kong has just bought a plot in The Sandbox, following the example of Adidas and the famous rapper Snoop Dogg.
What could at first seem like a fad may turn out to be the next big retail narrative. NFT-based digital products sold in the metaverse could have a premium collectible value, driving more and more brands into the blockchain space – definitely something to watch for in 2022.
For years, the crypto industry has been waiting for the arrival of institutions, but 2021 showed that retail can drive adoption just as well, with companies like CoinsPaid handling billions of dollars in BTC payments on e-Commerce and gaming sites. Even the metaverse land purchases by PwC and others followed a surge of retail interest. If this trend continues in 2022, it will be a strong sign that institutional demand isn’t the holy Grail of mass adoption after all – and that cryptocurrency is indeed an asset class for the people.
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