The impact of Bitcoin adoption on the developing world

There’s no denying that the crypto market has continued to be faced with a lot of bearish pressure over the last half a year or so, as is made evident by the fact that the total capitalization of this space has dipped quite significantly over the above stated time window.

However, amidst this sluggishness, there is enough data to suggest that Bitcoin has continued to garner an increasing amount of traction amongst people across the globe. To this point, it is worth noting that the amount of money entering Bitcoin and its various associated investment vehicles (such as ETFs) has continued to increase steadily since the start of 2022.

Furthermore, it is worth noting that the use of Bitcoin has surged across smaller, more emerging markets, suggesting that a growing forum of tech-savvy people are beginning to view the digital asset not only as a long-term store of value (SOV) but also as a legitimate medium of exchange.

Bitcoin’s future is looking increasingly bright

As per a study commissioned by cryptocurrency exchange AAX, the use of Bitcoin across emerging markets — such as Africa, Latin America, the Middle East, and Southeast Asia — has skyrocketed over the last couple of years, especially beyond being a simple tool for drawing short term gains.

For example, in the MENA region and S.E Asia, crypto enthusiasts have been accruing BTC for the purpose of money management, a move they think will allow them to become financially independent. To elaborate, investors across these areas have adopted Bitcoin to preserve the value of their hard-earned savings as well as with the aim of drawing short/long-term profits. Not only that, but they have also used the asset to act as a monetary hedge in an effort to offset potential losses and gains as far as their other investments go.

On the other hand, countries located within Africa and S.America have begun transacting in Bitcoin, with empirical data showing that people living in both continents have employed the digital asset to make payments, transfers, and receive funds on a regular basis.

Developing countries are embracing Bitcoin with open arms

As per the above-stated study, over the last 12 months, 52% percent of all individuals living in emerging markets have witnessed a marked increase in Bitcoin usage. To this point, use cases were found to be varied with 44% of people noticing more people using BTC for investment purposes while more than 48% noted a tangible increase in consumers using Bitcoin to facilitate payments and/or transfers.

That said, some of the challenges currently impeding the adoption of Bitcoin are the currency’s fluctuating value, security risks (such as those related to third-party thefts), and legislative uncertainty surrounding the asset, amongst other things. Most of these issues seem to be rooted in BTCs inherent autonomy which is part of its basic design framework.

The future will be driven by crypto

As Bitcoin’s use continues to grow, data suggests that the cryptocurrency can help ease many pain points currently affecting the global economy — such as expensive and time-consuming domestic and international fund transfers, and lack of access to high-quality financial services across developing areas.

Furthermore, with the growth of layer 2 solutions such as Stacks, RSK, Lightning Network (LN), it has become possible to expand Bitcoin’s core use cases. For example, Stacks is an open-source network of decentralized apps and smart contracts built on the Bitcoin network allowing users of the digital currency to not only access the burgeoning DeFi ecosystem but also improve its overall scalability, transaction throughput capacity, etc.

 Use cases aside, Bitcoin’s worth as an investment tool, borderless store of value, or even a borderless exchange of value is still hindered by the fact that many people lack knowledge about the crypto market, thinking of it only in terms of a short term profit making vehicle.

However, once people go beyond the immediate hype and understand the core features underlying the asset and its associated blockchain technology, there is a lot more that can be done using cryptocurrency. Therefore, moving forward, experts believe that it is essential for people to filter out the misinformation surrounding Bitcoin and do their own research, especially when it comes to understanding how bitcoin works, and the risks associated with it.