22 Pages Posted: 2 Apr 2016
Date Written: August 3, 2014
The Bitcoin Market Potential Index conceptualizes and ranks the potential utility of bitcoin across 178 countries to show where the cryptocurrency has the greatest relative potential for adoption. The index utilizes a data set with 40 variables from the following areas: technology penetration, international remittances, inflation, informal economy, financial repression, financial crises (historical), and bitcoin penetration. Standardized and re-scaled country level data both indicate that Argentina and Sub-Saharan Africa are the country and region, respectively, where bitcoin has the greatest potential for adoption. It is argued that regulation could have an important effect on bitcoin adoption but that it should be excluded as an index variable for now due to insufficient data and uncertainty over its short-term directional impact and longer-term consequences.
Keywords: bitcoin, blockchain, money, currency, cryptocurrency, alternative currency, technology penetration, international remittances, inflation, informal economy, financial repression, financial crises, ether, Ethereum, Ripple, XRP
JEL Classification: E26, E31, E40, E42, E49, E50, E51, E58, E59, F24, F38, G18, G28, J33, O17
Suggested Citation: Suggested Citation