he sharp fall in the value of the pound could be luring investors into cryptocurrencies like Bitcoin as new research found the UK is the only major European economy to experience growth in crypto adoption since the start of the year.
London’s thriving tech scene and world-class financial institutions are also among likely causes of the UK’s dominance in crypto, according to research by blockchain business Chainalysis.
Chainalysis director of research Kim Grauer told the Standard: “I don’t think people think, ‘the pound is down so I’ll turn to crypto’ but as the pound falls other options may be more attractive – ‘my portfolio is seeing lower returns, let me think about other options.’”
Sterling has fallen 19% against the dollar since January.
The UK ranks 17th globally for crypto adoption, up four places from 2021. It is the only high-income country to feature in the top 20 other than the US. Most of the other countries high in the list are emerging markets with more volatile currencies and capital controls. Vietnam ranked highest on the list, followed by the Philippines and Ukraine.
“One of the biggest reasons…many countries around the world push people into crypto is not a passion for the underlying cryptocurrency but capital controls that make it really free to transact,” Grauer said.
“Those people are happy to use crypto as an alternative, and that’s obviously a different reason for using crypto than in India, where people are using it for NFTs.”
Just under 50% of crypto activity in the UK relates to decentralised finance or DeFi, financial services conducted using blockchain technology.