A recent research note by Citi notes that Kenya is among the few countries in the world with highest per capita holding of Bitcoin.
The report reveals that bitcoin holdings as percent of GDP is highest in Russia, New Zealand, Nigeria, Ukraine, Kenya, South Africa, UK & Colombia in that order. Interestingly, United States it is very low at 0.17% as shown below.
According to Citi, Bitcoin is a poorly designed coin and likely to burst. It suggests that Ripple and Ethereum are better alternatives for cryptocurrency investment.
The Bank argues that the negative wealth effects of a burst of bitcoin would be meaningful in Russia, Nigeria, New Zealand, Kenya and others.
“If a bubble for an essentially ill-designed product pops, values drop close to zero. One way to think about wealth effects is therefore to estimate bitcoin holdings as percent of GDP and assumes it goes to zero. If bitcoin were to flop, those countries would already experience a meaningful negative wealth effect.” notes Citi.
Citi is however optimistic about Blockchain; the underlying technology behind bitcoin.
“Apart from trading in cryptocurrencies, the underlying blockchain technology has real-world applications, like – use in Ethereum smart contracts to facilitate trade finance, automate land title registry, insurance claims settlements; interbank global settlements with the help of Ripple XRP; KYC-Chain applications for financial institutions, facilitating client onboarding and securing user identity.