Crypto Trading in Pakistan Rises Rapidly in 2023 Amid Rupee Depreciation

While Pakistani authorities said on May 17 that they’re working to get cryptocurrencies banned in the country, a survey by global crypto exchange firm KuCoin shows that 33 percent of Pakistani crypto investors see the instrument as a hedge against the Rupee’s drastic plunge witnessed in the past few months.

According to KuCoin’s report “Into the Cryptoverse: Understanding Pakistani Crypto Investors 2023”, Trading, HODLing, peer-to-peer money transfers, and buying Non-Fungible Tokens (NFTs) are the most common use cases for cryptocurrencies in Pakistan.

As per findings, 47 percent of Pakistani crypto investors are aged 26 to 39 while 35 percent are under 25 years of age. Conducted from May 5 to May 12, 2023, the survey is based on a sample of 500 adult crypto users in the country.

17% Engage in Crypto Investment Amidst Rupee Depreciation

According to the 2022 Global Crypto Adoption Index by Chainalysis, Pakistan ranks 6th among all countries. In our recent survey in May 2023, 17 percent of internet users aged 18-60 in Pakistan identify themselves as crypto investors who currently own or have owned crypto in the past six months.

This shows a growing awareness and acceptance of crypto as a viable investment option among the general population as the Pakistani Rupee depreciated over 20 percent against US dollar in the past few months.

The profile of crypto investors suggests a greater representation and involvement of males and younger generations (Gen Z and Gen Y) in crypto investments in Pakistan. 66 percent identify as male, which highlights a gender imbalance within the crypto investment space. The largest age group (47 percent) of crypto investors belongs to Gen Y (aged 26 to 39). Gen Z (age 18 to 25) constitutes the second-largest group, accounting for 35 percent.

The majority of crypto investors in Pakistan, accounting for 66 percent of respondents, have an annual household income below Rs. 5 million. Additionally, 30 percent of new investors have begun investing in crypto within the past three months. This suggests that as crypto adoption grows, a significant portion of crypto investors in Pakistan come from households with moderate to lower income levels.

30% Investors Entered the Crypto Market in January-March

The data shows that a significant portion of respondents across all generations have recently entered the cryptocurrency market, with 30 percent reporting making their first transaction less than 3 months ago.

Gen Z demonstrates the highest percentage (36 percent) of individuals who made their first cryptocurrency transaction within the last three months.

There is a considerable portion of investors who have been involved in the crypto market for an extended period. Approximately 36 percent made their first transaction one year ago or earlier.

Growing Interest in Digital Assets

Overall, the data shows that crypto investments in Pakistan are predominantly in lower to moderate ranges. A significant portion (40 percent) of crypto investors in Pakistan have invested below Rs. 30,000 (~US$100). This is particularly evident among Gen Z (48 percent).

While Gen X investors exhibit a higher percentage (39 percent) of individuals investing in the middle ranges between Rs. 30,000 to 300,000, Gen Y investors exhibit a higher percentage of individuals investing in the higher ranges. 32 percent of Gen Y investors have invested above Rs. 300,000 (US$ 1000). This implies that Gen Y individuals may have more disposable income and motivation to invest.

The data reflects a diverse range of investment capacities among crypto investors in Pakistan, with the younger generation starting with smaller amounts.

Exposure

69 percent of crypto investors in Pakistan invest in crypto to be a part of the future, while 44 percent invest in crypto with the goal of accumulating wealth in the long run, indicating a focus on the potential for long-term value appreciation and capitalizing on the growth of crypto as an asset class.

49 percent invest in crypto to make transactions more convenient, while 33 percent invest in crypto to store asset value against depreciation.

Gen X investors have a higher inclination towards investing to be for long-term future and value storage, while Gen Z investors are more likely to invest in accumulated wealth

The survey reveals that trading is the most common use of crypto, with 46 percent of surveyed investors in Pakistan engaging in trading activities, while 30 percent indicated using crypto for HODLing (holding assets for the long term), earning through various yield-generating programs, or participating in staking.

29 percent of respondents reported using crypto for peer-to-peer money transfers, and 22 percent have used crypto for buying Non-Fungible Tokens (NFTs), indicating a growing interest in digital collectibles. However, the use of crypto for purchasing luxuries and daily goods is reported by 20 percent and 18 percent of respondents, respectively.

The survey also reveals other cases of value transfer with the use of crypto. 16 percent of respondents claimed to have used crypto gift cards or crypto for general gifting purposes. One-tenth of respondents (10 percent) have used crypto for receiving or paying salaries.

Overall, the survey reflects a range of use cases for cryptocurrencies in Pakistan, with implications for the evolving role of crypto in various aspects of financial transactions and investments within the country.

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