Europe is currently the world’s largest cryptocurrency economy, receiving more than €870 billion in cryptocurrency in the past year.
A new analysis by Chainalysis, a blockchain data platform, found that Central, Northern and Western Europe (CNWE) accounted for 25% of the world’s crypto activity.
The United Kingdom had the largest crypto trading volume in the CNWE region, with about €145 billion. The UK was followed by other European countries like France, Germany, the Netherlands and Spain.
While cryptocurrency transaction volumes in Europe started to increase in 2020, transaction volumes in East Asia, the previous world cryptocurrency capital in terms of transactions, experienced a steep drop.
Rapid Growth in Investment
Chainalysis notes that Europe’s growth was primarily driven by “whales” or large institutional investors transacting massive amounts of cryptocurrency.
The Chainalysis report noted that CNWE’s cryptocurrency economy started growing rapidly in July 2020. There was a huge increase in huge institutional-sized transactions of above $10 million (€8.5 million) worth of crypto.
Chainalysis’ data shows how this significant growth has been. For instance, in July 2020, large institutional transfers amounted to about €1.2 billion. By June 2021, the figure blew up to €39.6 billion, with the whales accounting for more than 50% of all cryptocurrency transfer volume in the CNWE region.
According to the report, a huge number of large institutional transactions in Europe were directed to Decentralized Finance (DeFi) platforms.
Large investors have embraced DeFi platforms as they offer methods to stake cryptocurrencies and allow long-term crypto holders to make interest by lending their cryptocurrency to the DeFi protocols.
