Crypto investors’ profit grew by 400 per cent in 2021, Ethereum dominates crypto gains: Chainalysis


Cryptocurrency investment are risky, but are profitable, says a new report by data analytics firm Chainalysis. The company in its latest report revealed that investors around the world realized total gains of $162.7 billion in 2021, compared to just $32.5 billion in 2020.

According to Chainalysis, the United States lead by a wide margin at an estimated $47 billion in realized cryptocurrency gains, followed by the UK, Germany, Japan, and China. Meanwhile, India ranked a lowly 21st with realized gains of around $1.85 billion.

The report highlights that Ethereum edged out Bitcoin in total realized gains globally at $76.3 billion to $74.7 billion. “We believe this reflects increased demand for Ethereum as the result of DeFi’s rise in 2021, as most DeFi protocols are built on the Ethereum blockchain and use Ethereum as their primary currency. While most individual countries follow this pattern, there are some notable exceptions. Japan, for instance, received a much higher share of realized gains from Bitcoin at just under $4.0 billion, compared to just $790 million in realized Ethereum gains,” the company said in its report.

The report further reveals that Turkey ranks sixth in realized cryptocurrency gains at $4.6 billion, Vietnam ranks 16th in realized cryptocurrency gains at $2.7 billion, Ukraine ranks 13th in crypto gains at $2.8 billion,  the Czech Republic ranks 19th at $1.9 billion, and Venezuela ranks 33rd in realized cryptocurrency gains at $1.1 billion.

Interestingly, in 2021, China’s witnessed a growth of 194 per cent in comparison to 2020. The total estimated realized cryptocurrency gains were $5.1 billion, up from $1.7 billion in 2020. Chainalysis notes that while that may sound substantial, it represents lower growth rate than other countries. For instance, the United States estimated realized cryptocurrency gains grow 476 per cent, up from $8.1 billion to $47.0 billion. UK witnessed a 431 per cent increase, and Germany’s gains grew by 423 per cent.

The data analytics firm believes that China’s lower growth rate is most likely due to the declines in the country’s cryptocurrency activity after government crackdowns.

“Our analysis of cryptocurrency gains should be encouraging to the cryptocurrency world, and reflects the growth of the ecosystem in 2021 — especially in DeFi. While there are still risks the industry must work to mitigate, the data not only shows that crypto asset prices are growing, but also indicates that cryptocurrency remains a source of economic opportunity for users in emerging markets,” the company added.

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