Blockchain data platform Chainalysis says increased institutional investment in decentralized finance (DeFi) has created the world’s largest cryptocurrency economy.
By reporting in a new way, the company is highlighting the rise of the digital economy in Central, Northern and Western Europe (CNWE), citing crypto whales that have been pumping money into DeFi since last July.
CNWE’s transaction volume has grown exponentially across almost all types of services and cryptocurrencies, but especially on DeFi protocols. Institutional investment inflows, indicated by large transactions, accounted for the bulk of the growth, although retail activity also increased.
The value of major institutional transactions of cryptocurrency grew from $1.4 billion in July 2020 to $46.3 billion in June 2021, when it represented more than half of CNWE’s business.”
Chainalysis highlights that the lion’s share of all institutional-size cryptocurrency transfers ended up on DeFi platforms in the past year.
“The data shows that in the past 12 months, the majority of volume transfers have been to DeFi platforms. So it is not surprising that most of the major corporate volume transfers were made in Ethereum (ETH) and moved to Ethereum (wETH), which is an ERC.20 token. It has the same value as Ethereum commonly used in DeFi protocols.
From the CNWE region, the largest countries by size were the United Kingdom, France, Germany and the Netherlands.
Chainalysis also divides the use of cryptocurrencies across different classes of digital assets.
The use of the stablecoin is consistently between 25% and 30% of the volume of transactions in most countries. The use of altcoins is equally stable in most regions at 8% to 11%.
However, we see more variation from the crash between Bitcoin and Ethereum or wETH. Together, Ethereum and wETH are the most popular cryptocurrencies in almost every country.”
CNWE received more than $1 trillion in digital assets last year, equivalent to 25% of global activity.
You can read the full Chainalysis report here.
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