North America Is 8th in Global Crypto Adoption. But Who's No. 1?

It's important to invest in cryptocurrency for the right reasons.

A recent report into global crypto adoption put the U.S. in eighth place. Blockchain data platform Chainalysis used various metrics to score the levels of crypto adoption in 154 different countries.

Given that 14% of Americans own cryptocurrency, it's not surprising to see the U.S. in the top 10. But it may be surprising to see Vietnam topping the charts.

Vietnam tops the global crypto adoption list

Vietnam stood out because of its high transaction volume and levels of grassroots adoption. It ranked highly in total cryptocurrency activity relative to the wealth of the average person.

Unlike indexes that focus only on transaction volume or amount, the study weighted its rankings against average income and wealth. That's partly why there aren't any Western European countries in the top 10, despite the high volumes of crypto transactions in those countries.

Here are the other top countries for crypto adoption, according to Chainalysis:

1. Vietnam
2. India
3. Pakistan
4. Ukraine
5. Kenya
6. Nigeria
7. Venezuela
8. United States
9. Togo
10. Argentina

Chainalysis says crypto adoption worldwide grew 2,300% from the third quarter of 2019 to the end of the second quarter of 2021. However, the reasons for the growth in crypto differ from country to country. The report points out that people in emerging markets often use crypto to guard against currency devaluation. In North America and Western Europe, it's institutional investors driving the rising appetite.

What makes cryptocurrency so popular in Vietnam?

A crypto expert interviewed for the report speculated that one big driver behind cryptocurrency growth in Vietnam is that it's similar to gambling. Binh Nguyen of the Royal Melbourne Institute of Technology in Vietnam says, “Most forms of gambling are illegal but quite popular in Vietnam, and I think that’s one reason people here are willing to invest in high volatility assets like cryptocurrency.”

If Binh is correct, it is a little concerning. Gambling or speculation is not a great basis for an investment decision. Cryptocurrency is a highly volatile asset, but it is still important to invest for the long term and make solid strategic decisions. Look at the real-world impact a crypto might have, what its management team is like, and what problems it can solve. Speculating on potential short-term gains can be extremely risky.

Another factor is that people living in Vietnam don't have the same access to other investment opportunities as they might in the U.S. Binh said very few people have accounts with stock brokers, and that if someone has money they want to invest, cryptocurrency is one of the few places they can put it.

U.S. customers have more investing options

Investors in Vietnam may have limited access to investment vehicles, but if you're in the U.S., you have a lot of options. You have the tools at your disposal to balance your crypto investments against other investment opportunities, from real estate to stocks and ETFs. And it's crucial that you do so.

Some of the platforms on our list of best cryptocurrency apps are also brokerages that sell stocks and other investment products. Alternatively, you could open one account with an online stock broker and another with a cryptocurrency exchange.

What matters most is to ensure your cryptocurrency investments only make up a small percentage of your overall portfolio. All investments carry risk, but cryptocurrency is still a relatively new and untested industry, with a lot of question marks hanging over it.

Make sure you're being smart with your crypto investments

Blockchain technology is exciting, and several cryptocurrencies have produced eye-watering returns this year. When you start to research, you'll find there are a lot of fascinating cryptos that may perform well in the long term. It's easy to get carried away and go all in on crypto, or even invest money that you need to cover your day-to-day living costs.

The problem is that those high potential returns come with a high level of risk. There's still a chance the bottom could fall out of the market. Increased regulation could hit the crypto industry hard, and there are several other factors that could topple this nascent industry.

That doesn't mean you shouldn't invest in crypto. However, it does mean you should only invest money you can afford to lose and that you balance your overall investment portfolio so cryptocurrency doesn't dominate. That way, you'll have other investments to fall back on if the worst happens and crypto collapses.