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Breaking: One Of The Largest P2P Crypto Exchanges Removes Ethereum Due To ‘Integrity’

Ray Youssef, CEO and co-founder of Paxful, has put his plan to remove Ethereum (ETH) from the exchange, which he revealed a week ago, into action today. The exchange is one of the largest peer-to-peer crypto trading platforms in the world, and Youssef says he has a big responsibility to his 11.6 million customers. Youssef wrote on Twitter today:

We finally kicked Ethereum off our marketplace. 11.6m humans safer. Integrity over revenue. Who is next?

The Paxful CEO further explained, “We need maximum momentum behind one clearing layer to win and Bitcoin is the only game in town. This isn’t an investment strategy, this is humanity rising up to liberate itself. ALL IN!”

The Reasons Behind The Anti-Ethereum Decision

In a newsletter, the Paxful CEO explained the backstory behind his decision to remove Ethereum from the exchange as early as 12:00 UTC on Thursday, Dec. 22. Under the tagline “Revenue is nice, but integrity trumps all,” Youssef describes economic apartheid as the “biggest problem in the world.”

It is, according to the Paxful CEO, “the root of all humanity’s suffering.” That’s why, as CEO of Paxful, he strives for a world “where Bitcoin frees billions of people held back by this evil system, especially those unnecessarily harmed living in the Global South”.

According to Youssef, there are ultimately three key arguments for why ETH does not support this mission (anymore) and is bad for the Bitcoin industry. The first reason Youssef cites is Ethereum’s shift from proof of work to proof of stake.

“Proof of work is the innovation that makes Bitcoin the only honest money there is, whereas proof of stake has rendered ETH essentially a digital form of fiat,” the CEO of Paxful claims.

Referring to the Tornado Cash censorship and the Ethereum Foundation, Youssef goes on to state that ETH is controlled by a small group of people, while “one day you will need permission to use it.”

The third argument is the scams that have emerged with Ethereum’s capabilities. While Youssef concedes ETH has “some utility for real-world use cases,” he says the tokens Ethereum has spawned are scams that have “robbed people of billions.”

Ultimately, the developments of the past years have set the Bitcoin industry back years. “They have stolen valuable momentum away from Bitcoin and cost us years on our mission,” Youssef explained.

Ethereum Price Near Key Resistance

The decision of Paxful is likely to arrive rather controversially in the crypto community, while it will find applause in the ranks of Bitcoin maxis.

Meanwhile, numerous experts, including Bloomberg Intelligence’s Mike McGlone, predict that ETH could outperform and even flip the largest cryptocurrency by market cap in the next bull market, at least temporarily.

At press time, ETH was trading at $1,215. Thus, the price is sitting just below key resistance at the $1,220 mark.

Ethereum ETH USD 2022-12-21

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Chainalysis Report Reveals Crypto Has Gone “Global” In 2021

The blockchain is an immutable record. Companies like Chainalysis make a living out of interpreting that data, extracting value and insights from the numbers. And on-chain analysis reveals that crypto is now “a truly global phenomenon.” The data comes from Chainalysis’ 2021 Global Crypto Adoption Index. The people that really need crypto, qualified as “emerging markets” in the paper, are increasingly involved in the space.

Related Reading | Crypto Company Circle Seeks To Become Global Digital Currency Bank

In The Weekly Update, our friends at Arcane Research found this to be the headline:

“Chainalysis further ranked the countries with the highest crypto adoption following their methodology. A majority of the countries featuring at the top 20 list are emerging market economies.” 

And clarifying their intention, Chainalysis’ paper itself starts with:

“While the professional and institutional markets are crucial, we want to highlight the countries with the greatest cryptocurrency adoption by ordinary people, and focus on use cases related to transactions and individual saving, rather than trading and speculation.”

That being said, we have to talk about…

BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
What Was Chainalysis ’ Methodology? 

The company focused on “cryptocurrency adoption by ordinary people,” so they weighted everything by purchasing power parity per capita. They ranked “all 154 countries” according to three metrics:

  1. On-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita.
  2. On-chain retail value transferred, weighted by PPP per capita.
  3. Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and number of internet users.

It’s worth clarifying that in that third one, they “rely on data supplied by two of the largest P2P platforms operating — LocalBitcoins and Paxful — to calculate each country’s P2P trade volume.” Because, for the most part, P2P trading isn’t reflexed on-chain. Chainalysis admits that “While this means that we aren’t capturing all P2P value, we believe these two exchanges are popular enough for their metrics to act as an overall approximation.”

DeFi Is Not Part Of The Studio. DeFi Stats Coming Soon

It’s also worth noting that, “Transactions carried out by DeFi protocol users all show up on-chain, as no centralized service ever takes custody of users’ assets.” That presented a problem, because it “skewed” their rankings “toward countries with comparatively more DeFi users.” So, Chainalysis decided to leave DeFi stats out of this particular studio.

However, they promise. “We also decided to create a new DeFi Adoption Index, which will be available in the coming weeks.”

Global Crypto Adoption Index 2021 | Source: Arcane Research
Chainalysis Identified Three Key Trends

On-chain analysis reveals that:

  • Global cryptocurrency adoption is skyrocketing

This might sound like an obvious claim, but the surprising thing is the staggering numbers. 

“At the end of Q2 2020, following a period of little growth, total global adoption stood at 2.5 based on our summed up country index scores. At the end of Q2 2021, that total score stands at 24, suggesting that global adoption has grown by over 2300% since Q3 2019 and over 881% in the last year.”

  • Adoption in emerging markets grows, powered by P2P platforms

Not everyone has access to a globally accepted bank account. The people who don’t have access to centralized exchanges found a way to participate in the crypto space. And are doing it in a major way. 

  • China and the U.S. dip in our rankings

Not surprisingly, “analysis shows how far P2P volumes have fallen in the two countries compared to worldwide volumes.” However, according to Chainalysis, further considerations indicate that:

“This activity may reflect increasing professionalization and institutionalization of cryptocurrency trading in the United States, and in China’s case may be related to ongoing government crackdowns on cryptocurrency trading.” 

Why are Chinese people abandoning P2P trading so radically? Wouldn’t the “government crackdowns on cryptocurrency trading” cause a surge in old P2P trading instead?

Related Reading | Chainalysis: 2020 Is The Year of The Institutional Bitcoin Investor

In any case, Chainalysis concludes their study with:

“The clear takeaway though is this: Cryptocurrency adoption has skyrocketed in the last twelve months, and the variation in the countries contributing to that show that cryptocurrency is a truly global phenomenon.”

And we couldn’t agree more. It is.

Global Crypto Adoption Index | Source: Chainalysis
Featured Image by NASA on Unsplash – Charts by TradingView