The Bitcoin (BTC) and crypto market is in full swing in Central, Northern and Western Europe. Indeed, it stands out as the largest crypto economy in the past year, with the record amount of traded volumes.
25% of crypto activity generated by Europe
Chainalysis has just published a report that reveals Central, Northern and Western Europe (CNWE) as the largest global crypto economy over the period of July 2020 to July 2021. Over the same period, more than $1 trillion in digital assets were reportedly traded by European investors.
In 2019, ECNO ranked second behind East Asia, which generated about 30 percent of global digital asset trading. However, Chinese and South Korean “cryptocurrency” policies have resulted in a significant reduction in traded volumes since May 2020. This strict regulation of digital assets in East Asia has undoubtedly contributed to the growth in ECNO trading volume, which accounts for a quarter of global crypto transactions.
Changes in the typology of crypto investors
It is from July 2020 that the crypto economy of ECNO has experienced an acceleration in its growth. This surge coincides with the mutations seen in the types of investors. Indeed, since July 2020, large institutional transactions, i.e. those above $10 million, have been steadily increasing.
In July 2020, they represented the equivalent of $1.4 billion, while in June 2021, they constituted more than half of all transactions, with an estimated value of $46.3 billion. At the same time, the share of transactions made by individual investors has decreased significantly.
In addition to propelling the crypto economy in Central, Northern and Western Europe, these shifts also have implications for popular crypto investments. Indeed, decentralized finance (DeFi) has seduced large institutional investors who have favored investments in ether (ETH), commonly used by DeFi protocols, while abandoning bitcoin and altcoins.
Conversely, institutional investors are still Bitcoin maximalists and are an exception to all other investors who favor DeFi protocols. In fact, more than 40% of investments from this category of players have gone to Bitcoin.
The rise of DeFi in Europe
Furthermore, one of the other insights from the Chainalysis report lies in the place DeFi has taken within the ECNO crypto ecosystem. In the first 6 months of 2021, DeFi services were consistently in the top 5 crypto platforms receiving the most funding. It’s worth noting that Uniswap and Instadapp stand out for the significant increase in funds received over the same period.
Finally, the UK, France and Germany are the 3 central European countries that have gathered the largest amounts of digital asset exchanges. The UK holds the top spot with approximately $170 billion exchanged in crypto between July 2020 and June 2021.
Here again, the surge in decentralized finance can be seen. With the exception of Germany and Spain, more than half of all crypto interactions were conducted with DeFi protocols. In France, DeFi’s place is larger than average. This is not surprising, since the notion of savings and passive income is culturally very present in France.
