Decentralized finance (DeFi) has now become a major catalyst for Europe’s cryptocurrency economy. Major institutions have also increased their share of transactions considerably.
The region of northern, central, and western Europe has now emerged as the world’s biggest and most active crypto block, recording at least $1 trillion worth of digital assets over the last year, based on new research from Chainalysis blockchain analytics company.
This report was released on September 28, 2021, and it discovered that the region accounted for 25% of global cryptocurrency activity between July 2021 and June 2021. Notably, this region witnessed a steep spike in transaction volume across all the crypto sub-categories, mostly decentralized finance (DeFi).
Chainalysis describes cryptocurrency transactions as anything involving trade, investments, and business dealings. Furthermore, Europe has become the hotbed for institutional investing, with transactions values in the category expanding to reach $46.3 billion in June 2021 compared with only $1.4 billion in July 2021.
Interestingly, maybe the UK is the single biggest crypto economy in the region recording $170 billion worth of transactions. Around 49% of the value was sent through DeFi protocols. Henry Updegrave, Chainalysis’ senior content marketing manager, said:
“The U.K.’s growth is driven mostly by growing institutional investment, based on the large-sized transfers driving most of its transaction volume.”
The growth of competing smart contract platforms coupled with the arrival of decentralized finance and a secular bull market for bitcoin has contributed to cryptocurrency’s massive rally in the study period. Thus, it comes as no surprise that Europe’s crypto market activity peaked in May 2021 at the height of the crypto bull market that was a month eliminated from Bitcoin reaching $64,000.
Chainalysis’ data agrees to a growing list of evidence that indicates that huge institutional investors have become a driving force within the crypto sector. Family offices, wealth managers, and several other institutional operators have invested billions of dollars into Ether (ETH) and Bitcoin (BTC) investment products that are offered by CoinShares, Grayscale, 21Shares, and several others.
Beyond these advanced economies of Europe, Chainalysis research has documented the growing uptake of cryptocurrency in emerging markets. The Chainalylsis 2021 Global Crypto Adoption Index named India, Vietnam, and Pakistan as the leading nations for adoption based on the on-chain value that is received, retail transactions, and peer-to-peer exchange trade volume.