Europe becomes world’s largest crypto economy, thanks to DeFi


According to a recent Chain analysis report, Central, Northern and Western Europe (CNWE) has become the world’s largest crypto economy. In the past year, the region has received over $ 1,000 billion in cryptocurrency, and that amount represents 25% of all global activity. CNWE ranked second in last year’s poll. However, the tremendous growth that started in July 2020 has pushed Europe to the top this year.

While retail activity has also grown, institutional investments have been the source of most transactions, with 50% going to DeFi.

DeFi drives crypto growth in Europe

CNWE has seen significant growth in transaction volume across all types of cryptocurrencies and services, but especially DeFi protocols. According to Chainalysis, the growth was mainly the result of an influx of institutional investment, signaled by large transactions. As of July 2020, there has been an increase in transfers of over $ 10 million worth of crypto.

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The value of institutional crypto transactions increased from $ 1.4 billion in July 2020 to $ 46.3 billion in June 2021. Between this period, the UK had the highest value of crypto transactions in Europe at 170 billion. of dollars. Of this amount, DeFi protocols received 49%. Chainalysis Senior Director of Content Marketing Henry Updegrave commented on the growth. “The UK’s growth is primarily driven by growth in institutional investment, based on large transfers that are the source of the bulk of its transaction volume,” he said. Co-telegraph.

France, Germany, the Netherlands and Switzerland are also among the top five countries.

Chainalysis data revealed that over the past 12 months, the bulk of large institutional-sized transfers have gone to DeFi platforms. Most of these large institutional transfers were made in Ethereum and Enveloped Ethereum (wETH). wETH is an ERC-20 token of equivalent value to Ethereum commonly used in DeFi protocols.

European crypto exchanges

“DeFi protocols represent three to four of the top five services in most months, with Uniswap, Instadapp, and dydx make frequent appearances. Binance and Coinbase, meanwhile, remain the most popular centralized exchanges. the researchers explained

Decentralized finance has grown into a multi-billion dollar industry. The popularity of the DeFi market is quite visible in institutional trends in Europe, and a similar trend can be seen in the United States as well.

Currencies traded in European countries

Among European countries, the United Kingdom is largely in the lead, followed by France and Germany.

Combined, Ethereum and wETH are the most popular cryptocurrency in almost every country. Bitcoin accounts for 27% of the value of transactions in the UK while Ethereum and WETH represent 40%. In Germany, Bitcoin represents 28% of the transaction volume while Ethereum and wETH represent 36%. However, France only spends 20% of the transaction volume on Bitcoin and 45% on Ethereum and wETH.

TradingView.com's Total Crypto Market Cap

Total crypto market cap at $1.84 Trillion | Source: Crypto Total Market Cap from TradingView.com

Stablecoin usage consistently sits between 25% and 30% of all trading volume for most countries. However, for outliers like Monaco, stablecoins account for 39% of all crypto activity. Altcoin usage is also stable at 8% to 11% for most regions.

Featured image from PYMNTS.com, Chart from TradingView.com