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 highlights the rise of the digital economy in Central, Northern and Western Europe (CNWE), citing crypto whales that have been pumping money into DeFi as of 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 large institutional transactions for 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, most enterprise volume transfers have been to DeFi platforms. Given this, it is not surprising that most of the major enterprise volume transfers are made in Ethereum (ETH) and transferred to Ethereum (wETH), the ERC token .-20 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 crypto 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. Altcoin usage is equally stable at 8% to 11% for most regions.
However, we are seeing 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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