Professor Andrew Urquhart is Professor of Finance and Monetary Know-how and Head of the Division of Finance at Birmingham Enterprise Faculty (BBS).
That is the fifth instalment of the Professor Coin column, during which I deliver vital insights from revealed educational literature on cryptocurrencies to the Decrypt readership. On this article, we’ll examine cryptocurrency adoption.
Cryptocurrencies are clearly rising by way of dimension, scale and varieties of choices, which altogether signifies the rising significance and affect they’ve on the standard monetary system.
They could have begun life being traded by solely a choose few pc programmers, however because the introduction of Bitcoin futures in 2017 and the following introduction of different spinoff merchandise, culminating within the Bitcoin spot ETF launch in January 2024, extra buyers are taking discover of this modern asset class.
On the core of the fourth industrial revolution is synthetic intelligence, info communication and expertise, the web of issues and blockchains—and PwC predicts that blockchains will increase international GDP by $1.76 trillion by 2030.
China locations blockchain as considered one of its high 5 priorities, whereas different nations, together with Germany, Japan, the UK and France, all see the potential advantages of over $50 billion. The elevated investor curiosity in current instances could have modified the person base ceaselessly, and this adoption could differ throughout industries, territories, regulatory domains and political realms. On this column, I examine what’s driving cryptocurrency adoption throughout the globe.
Some current work examines the connection between sure macro-national developmental indicators and cryptocurrency deployment throughout 137 nations, and apparently finds that the nations with larger training, human improvement, democracy, regulatory high quality and gross home product (GDP) have larger adoption of cryptocurrencies.
Nonetheless, nations with much less financial freedom and extra corruption have skilled much less adoption, indicating that extra open and free nation states have skilled adoption. This implies that it isn’t corrupt, uneducated states which can be adopting cryptocurrencies, however extra open, democratic and free states.
Belief, however confirm
Now that we all know the financial and state variables have an effect on adoption throughout totally different territories, however what about belief? Belief is a social assemble and a perception, which fosters financial progress, monetary improvement and monetary inclusion.
Belief has fallen in current a long time—and as European Central Financial institution President Christine Lagarde remarked, “On this age of diminished belief, it’s the monetary sector that takes final place in opinion surveys.”
Work by Jalan et al (2023) helps the work by Bhimani et al (2022) in displaying that nations with larger belief ranges have the next curiosity in, and adoption of, cryptocurrencies, confirming the significance of belief within the progress of economic markets.
In a extra detailed research, Saeedi and Al-Fattal (2025) discover which elements of belief are vital for cryptocurrency adoption and so they discover that females place extra weight on regulation belief than males, whereas social belief is extra vital for older contributors.
DeFi adoption
What concerning the distinction between the adoption of cryptocurrencies and decentralized finance (DeFi)? Latest work by Nguyen and Nguyen (2024) suggests that top cryptocurrency adoption can come up from the mixture of excessive inhabitants, excessive inflation, low social connectedness, democracy, and uncertainty avoidance, whereas excessive human improvement, excessive inhabitants, and excessive monetary improvement appears to be the dominant configurations in explaining a rustic’s DeFi adoption.
However what impression does adoption, and several types of adoption, have on cryptocurrencies? Latest work by Rzayev et al (2025) doc that early adopters of cryptocurrencies drive cryptocurrency returns and enhance value effectivity, whereas late adopters contribute to noisier costs and efficiencies. Subsequently, early adopters are key drivers for any cryptocurrencies.
Subsequently, the educational literature means that adoption of cryptocurrencies varies extensively the world over, however there are key financial and state indicators that designate adoption. Additional, the kind of adoption impacts the efficiency of cryptocurrencies, indicating that not all consideration is created equally.
For extra info, see:
Bhimani, A., Hausken, Okay., Arif, S. (2022). Do nationwide improvement elements have an effect on cryptocurrency adoption? Technological Forecasting and Social Change, 181, 121739.
Jalan, A., Matkovskyy, R., Urquhart, A., Yarovaya, L. (2023). The position of interpersonal belief in cryptocurrency adoption. Journal of Worldwide Monetary Markets, Establishments and Cash, 83, 101715.
Nguyen, L. T. M., Nguyen, P. T. (2024). Determinants of cryptocurrency and decentralized finance adoption – A configurational exploration. Technological Forecasting and Social Probability, 201, 123244.
Rzayev, Okay., Sakkas, A., Urquhart, A. (2025). An adoption mannequin of cryptocurrencies. European Journal of Operational Analysis, 323, 253-266.
Saeedi, A., Al-Fattal, A. (2025). Analyzing belief in cryptocurrency funding: Insights type the structural equation modelling. Technological Forecasting and Social Change, 210, 123882.
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