LocalBitcoins User Volume Rates for Crypto Adoption May Not Be Reliable as Thought

Popular peer to peer bitcoin trading platform LocalBitcoins for cryptocurrency buyers and sellers becomes subject of controversial reporting in its weekly trading volume activity. A look at what this researcher found when comparing adoption signals in hotspots like Hong Kong, Egypt and Iran as well as Latin America.

The cryptocurrency market has made its biggest leap in terms of global adoption, or at least the data says so. The primary way to measure the adoption rate is currently done with the help of data from LocalBitcoins, peer-to-peer exchanges available in over 250 countries.

The platform churns out data accumulated from all these countries separately on a weekly basis, which by market standards were considered a fair measure to check the adoption rate. However, is the data from LocalBitcoins as reliable as it is considered to be?

Well, many analysts have started to look closely into the ways the platform collects its data and categorizes it. The analysis suggested that the data collected by the platform might not be a reliable way of measuring the crypto adoption rates of various countries and regions.

Matt Ahlborg, one of the analysts studying the platform's data output noted that the platform's ways of projecting data on adoption could be misleading. He gave the example of HongKong which as per the LocalBitcoins data has seen a significant surge in Bitcoin use due to the ongoing protest against the Chinese government. However, the locals in the area suggest they haven't noticed any such change in the finances nor they have seen increased discussions about using Bitcoin.

Ahlborg found that the spike in data for Bitcoin usage was the job of a single trader who supposedly made 30 significant transactions to move a hefty amount of Bitcoin using the peer-to-peer exchange.

Iran and Egypt trades differ with the data projection of LocalBitcoins

Further studies seemed to defy similar claims made in terms of Iran and Egypt as well, where the local Bitcoin traders suggested that the data projection of the exchange has no correlation with the reality on the ground.

One of the traders in Egypt said,

“I don’t believe in these statistics as it never reflects the real volume … Egypt is still in the gray area of crypto regulations, and it is not allowed publicly. This is why there’s no clear data or statistics about it.”

LocalBitcoins explain the data projection and mismatch

Veruscka Xavier Filgueira, spokesperson for LocalBitcoins addressed the concerns raised by independent studies and said that the small transactions are still an issue and often find themselves miscategorized, but noted that these smaller transactions do not really make much of a difference in the country's overall demographics.

However, Filgueira did mention that high volume trades along with a long period of activeness by a certain group of traders can lead to variation in volume.

She said,

“it is possible that some volume variation is driven by a particularly high volume trade or an exceptionally active period for a group of traders.”

Similarly, there has been a lot of noise about Venezuela being revived by Bitcoin and has been creating new trading volume records every other month. However local Bitcoin traders told that most of the significant volumes responsible for projecting the high rate of adoption come from government officials looking to get richer.

A local entrepreneur who uses the peer-to-peer exchange to run his company explained how government officials are still looking to fill their pockets.

He explained,

“Mining can only give you a certain amount, but to print bolivares non-stop and then buy bitcoins can give you much more,”

However, Filgueira countered the claim made by the locals by pointing out that the average transactions coming from Venezuela are around $30 which suggested a strong presence of local people in the Bitcoin community.

The entrepreneur agreed with the analogy put forward by Filgueira and said,

“Government officials use gold as a way to funnel money in and out of the country, and lately, they’ve been talking about bitcoin. But I don’t think they’re using LocalBitcoins, that’s more for regular people.”

The spokesperson for the platform agreed that the regional data is still very unreliable and thus the high volume trades made by whales often get registered and traced back but the smaller ones don't.

She concluded,

“LocalBitcoins’ largest volumes in 2014 were concentrated in countries like the UK and in the USA and now we have Venezuela, Russia, and Nigeria in the list of countries with the highest trade volumes, which doesn’t only reflect the change in the profile of our user base but might also indicate a step forward in the usage of BTC as an alternative financial system.”

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Silvia A
Silvia A
Though relatively new to the cryptocurrency and blockchain space, Silvia has a strong interest in the field and a love of writing as well. She brings an interesting take to current happenings in the industry and enjoys introducing the latest developments to cryptocurrency and blockchain enthusiasts alike. She’s excited to promote a vibrant and fresh discussion as the industry continues to develop and move forward.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,469FansLike
2,795FollowersFollow
4,232FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

CoinDCX Becomes The First Indian Crypto Exchange To Launch Token Staking Services

Indian cryptocurrency exchange, CoinDCX, becomes the first in the country to launch simple staking services for its users. First reported on Coindesk, the staking...

Bitcoin Dollar Cost Averaging From 2017 Market Peak Still Returned 61.8%

Bitcoin price remains strong, not far from hitting $12,000 yet again after the touch and go over the weekend. Interestingly, despite the fact that the...

DEX Leader Raises $11 Million in Series A Funding for Uniswap V3 Following an Explosive Month

A popular and widely used decentralized exchange (DEX) Uniswap has raised $11 million in Series A funding led by Andreessen Horowitz with additional investment...

Dapper Labs Raises $12M with NBA Players from the Brooklyn Nets & Miami Heat Participating

Vancouver-based Dapper Labs has raised $12 million in its latest financing round with additional backing from Coinbase ventures and Distributed Global. Its existing investors...

DeFi App Aave Creates First Credit Delegation Loan to DeversiFi Decentralized Exchange

DeFi lending platform, Aave completes its first-ever ‘credit delegation’ as DeversiFi borrows over $230,000 without posting collateral. The service agreement was signed on...

Bitcoin Futures Trading at a High Premium; Already Hitting $12,000 on CME

Bitcoin has yet again gained momentum, with people expecting for $12k to hit soon. According to analyst Mati Greenspan, for a sustainable rally, a...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today