Cryptocurrencies have gained significant traction in Pakistan as investors seek to navigate the volatility of the Rupee. Despite recent discussions about a potential ban on cryptocurrencies, a survey conducted by global crypto exchange firm KuCoin reveals that 33 percent of Pakistani crypto investors view digital assets as a hedge against the Rupee’s drastic plunge. This article delves into the findings of the survey, shedding light on the demographics, investment patterns, and use cases of cryptocurrencies in Pakistan.

Demographics of Pakistani Crypto Investors

Younger Generations and Male Dominance in Crypto Investments

The survey indicates that 47 percent of Pakistani crypto investors are aged between 26 and 39, while 35 percent fall under the age of 25. Conducted from May 5 to May 12, 2023, the survey involved 500 adult crypto users across the country. Additionally, it reveals a gender imbalance within the crypto investment space, with 66 percent of respondents identifying as male. These findings highlight the increasing representation of younger generations, particularly Gen Z and Gen Y, in the crypto investment landscape in Pakistan.

Income Levels and Entry into the Crypto Market

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

Investment Patterns in the Pakistani Crypto Market

Recent Entry and Long-Term Involvement

Around 30 percent of respondents across all generations have recently entered the cryptocurrency market, with Gen Z showing the highest percentage (36 percent) of individuals who made their first transaction within the last three months. On the other hand, approximately 36 percent of investors have been involved in the market for over a year.

Investment Ranges and Generational Differences

The data indicates that crypto investments in Pakistan predominantly fall within lower to moderate ranges. Notably, 40 percent of investors have allocated below Rs. 30,000 (~US$100) to cryptocurrencies, particularly among Gen Z investors, where this percentage increases to 48 percent. Gen Y investors, on the other hand, exhibit a higher inclination towards investing larger amounts, with 32 percent having invested above Rs. 300,000 (US$1,000). This suggests that Gen Y individuals may possess more disposable income and motivation to invest.

Use Cases and Objectives of Pakistani Crypto Investors

Future Potential and Wealth Accumulation

The survey reveals that 69 percent of crypto investors in Pakistan embrace digital assets with the objective of being part of the future. Furthermore, 44 percent invest in cryptocurrencies to accumulate wealth in the long run, emphasizing their belief in the potential for long-term value appreciation and capitalizing on the growth of crypto as an asset class.

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Convenience and Asset Value Storage

Approximately 49 percent of investors use cryptocurrencies to make transactions more convenient, while 33 percent see crypto as a means to store asset value against depreciation. Notably, Gen X investors exhibit a higher inclination towards investing for long-term future and value storage, while Gen Z investors prioritize accumulating wealth.

Emerging Use Cases and Adoption of Cryptocurrencies

Trading, HODLing, and Yield-Generating Programs

Trading remains the most common use case for cryptocurrencies among surveyed investors in Pakistan, with 46 percent engaging in trading activities. Additionally, 30 percent use crypto for HODLing (holding assets for the long term), earning through yield-generating programs, or participating in staking.

Peer-to-Peer Transfers and NFTs

The survey highlights that 29 percent of respondents use cryptocurrencies for peer-to-peer money transfers, indicating the growing adoption of digital currencies for efficient remittance purposes. Moreover, 22 percent have used crypto to purchase Non-Fungible Tokens (NFTs), showcasing a burgeoning interest in digital collectibles.

Crypto for Goods and Services

Approximately 20 percent of respondents reported using cryptocurrencies for purchasing luxuries, while 18 percent utilized digital assets for daily goods. This signifies the potential for cryptocurrencies to play a role in both high-end and everyday transactions in Pakistan.

Value Transfer and Salaries

Moreover, 16 percent of respondents claimed to have used crypto gift cards or cryptocurrencies for general gifting purposes. Additionally, 10 percent have used crypto for receiving or paying salaries, indicating a growing trend of incorporating digital assets into traditional payment methods.

Conclusion

The survey provides valuable insights into the expanding landscape of cryptocurrency investments in Pakistan. With a significant percentage of younger investors and a gender imbalance within the crypto space, Pakistan showcases a growing acceptance and adoption of digital assets. As the Pakistani Rupee depreciates, cryptocurrencies have emerged as a potential hedge against economic instability. With diverse investment patterns, use cases, and a focus on the long-term potential, the future of cryptocurrencies in Pakistan appears promising, hinting at a gradual integration into various financial transactions and investments within the country.