- Despite the dip in valuation, a single Bitcoin still costs more than most Americans make in over six months.
- Earnings are not predictive of adoption, as crypto usage is higher in low-income countries.
Bitcoin has lost over 50% of its value in the last year, but it is important to put this dip in context. Comparing its current trading price with the average monthly income of a range of countries, BanklessTimes shows how long a worker in each country would have to work to afford a single Bitcoin.
The results are illuminating, especially when we consider cryptocurrency adoption rates. We find that countries with the highest adoption rates are generally very poor, with the average person having to work for over ten years to buy one Bitcoin.
This suggests that investment in cryptocurrency is not about individual affordability but a host of political and social conditions that make new monetary systems more appealing.
It Takes 6 Months to Earn a Single Bitcoin in the USA
The average worker in the United States earns $3,714.22 after tax each month. Based on the valuation of Bitcoin on August 4th, 2022 ($22,996.31), an American would have to work slightly more than six months to earn enough to buy a single Bitcoin. And that’s if they were able to forego rent, food, and any form of leisure!
However, the price of Bitcoin would undoubtedly change over that period. In the past six months of 2022, Bitcoin has hit a high of $47,459.26 (on March 30th) and a low of $19,047 (on June 19th). So with this level of price fluctuation, a worker could spend six months saving up to buy a single Bitcoin — only to discover that they now need to work another six months to afford it.
High-Earning Countries Are Slower to Adopt Crypto
Cryptocurrency is often portrayed as exploiting poorer countries, and there is some support for this in our data. Kazakhstan, for example, is the world’s third largest miner of Bitcoin. But it would take the average worker in that country nearly five years to earn enough to buy a single Bitcoin.
However, richer countries are actually less likely to adopt cryptocurrency than poorer ones. For example, three times more Nigerians own or use crypto than Swiss citizens, despite earning 36 times less.
It would take the average Nigerian about eleven and a half years to buy a single Bitcoin, while a Swiss worker (earning over $6,000 per month after tax) could buy a Bitcoin with less than four monthly wages. Yet, according to a recent global report, 63% of Nigerians say crypto is the future of money, and 42% own or use it, while just 16% of people in Switzerland do.
Explaining the Data
These findings are likely driven by underlying conditions. For example, populations in Africa and Latin America are far more likely to see cryptocurrency as a bulwark against inflation — and more likely to have experienced hyperinflation in recent times.
They are also less likely to distrust cryptocurrency inherently, less likely to express concerns about a lack of government backing, and far more likely to say crypto is the “future of money.”
The CEO of Bankless TimesThis data helps put the price of Bitcoin in perspective. People are not generally buying into crypto because it is an easy investment, or necessarily affordable to them, but because they believe it is the future of money — and that it will help thrive long term.
