Blockchain data platform Chainalysis says that a surge of institutional investment in the decentralized finance (DeFi) space has created the world’s largest cryptocurrency economy.
In a new report, the firm highlights the rise of the digital economy in Central, Northern, and Western Europe (CNWE), citing crypto whales pouring funds into DeFi starting in July of last year.
“CNWE’s transaction volume grew significantly across virtually all cryptocurrencies and service types, but especially on DeFi protocols. An influx of institutional investment, signaled by large transactions, drove most of the growth, though retail activity also increased.
Large institutional cryptocurrency transaction value grew from $1.4 billion in July 2020 to $46.3 billion in June 2021, at which point it made up more than half of all CNWE activity.”
Chainalysis highlights that the lion’s share of all institutional-sized crypto transfers over the last year ended up going to DeFi platforms.
“The data shows that over the last 12 months, the majority of large institutional-sized transfers went to DeFi platforms. Given that, it’s not surprising that the majority of those large institutional transfers were made in Ethereum (ETH) and wrapped Ethereum (wETH), an ERC-20 token of equivalent value to Ethereum commonly used in DeFi protocols.”
Among the CNWE region, the leading countries by volume were the United Kingdom, France, Germany, and the Netherlands.
Chainalysis also breaks down crypto usage among the different classes of digital assets.
“Stablecoin usage is consistently between 25% and 30% of all transaction volume for most countries. Altcoin usage is similarly consistent at 8% to 11% for most regions.
However, we see more variance in the breakdown between Bitcoin and Ethereum or wETH. Combined, Ethereum and wETH are the most popular cryptocurrency in nearly every country.”
CNWE received over $1 trillion of digital assets in the last year, which equates to 25% of activity worldwide.
You can read the full Chainalysis report here.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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