2020 was a truly significant year of disruption for Bitcoin (BTC), as an inflow of institutional capital “spurred” virtual assets to set new old highs, Chainalysis notes while noting that many Americans and countries would likely have benefited from the increase. prices in the crypto markets.
Chainalysis writes in a blog post that a cryptocurrency geoanalysis is complicated due to the decentralized nature of the technology. The blockchain analytics company clarified that it is highly unlikely or certain where exactly the parties of a specific crypto transaction can be located. .
But the company claims to be able to provide a “good” estimate of knowledge of transactions from all other facilities that Chainalysis tracks regularly.
The blockchain company revealed that it measures chain flows at each virtual currency exchange and then estimated the overall earnings in USD earned “on the asset under consultation (Bitcoin in this case) by measuring the differences in the value of the asset at the time it got rid of the platform compared to the time it received.
Chainalysis also argued that they “distribute those gains (or losses) across the country based on the percentage of Internet traffic that country represents on the internet exchange site, as we did when we created our global crypto adoption index. “This research provides them with a fair approximation of the “realized gains” that Bitcoin investors in the country made last year, but it doesn’t take into account gains on assets that “have not yet been withdrawn from an exchange,” Chainlaysis noted.
The blockchain analytics firm also argued that the first thing other people would possibly notice is the “apparent dominance” of the US. investors collectively made more than $4 billion in Bitcoin profits “realized” last year, the company revealed, while noting that this amount is more than 3 times greater than that of the next highest country, China.
Chainalysis stated that those numbers would possibly seem a bit unforeseen or unforeseen given that China has traditionally “by far the largest gross volume of cryptocurrency transactions. “However, U. S. -centric virtual currency exchanges recorded very giant inflows last year that appear to have been. “carried out towards the end of the year, which explains the significant achievements of the country, “revealed Chainalysis.
The blockchain corporation added:
After further inspection, what stands out at most is the number of countries that appear to exceed their weight in bitcoin investment compared to their rating on classic economic measures. Vietnam is the best example of this. While Vietnam has experienced ordinary economic expansion over the more than 20 years, increasing its poverty rate from over 70% to less than 6% since 2002, the country ranks 53rd in terms of GDP with $262 billion and is ranked as a declining middle-income country according to the World Bank. “
But Vietnam has a higher point of crypto adoption “at the base”, as the country ranks tenth globally in chainalysis’s Global Cryptography Adoption Index. Last year, Vietnam ranked 13th among BTC’s overall investment gains with $351 million, “surpassing countries. “with the best ratings on classic economic measures like Australia, Saudi Arabia and Belgium. “
This phenomenon can now be noticed in countries, Chainalysis revealed:
Until a Supreme Court ruling in March last year, India had tried to ban all banking establishments from trading with cryptocurrency-related entities, making it difficult for locals to buy or crypto-asset industries.
While the resolution “sparked optimism” in India’s crypto community, the country’s government also proposed a “general ban” that may also prevent citizens from buying, selling, holding or exploiting virtual currency. (Note: But now, reports have emerged claiming that the country doesn’t ban Bitcoin after all, and would possibly even treat it as an asset class. )
As Chainalyais noted, those regulations may have potentially prevented Indian investors or investors from profiting from the recent boom in the cryptocurrency market “to the extent of investors from their peer countries. “
The blockchain corporation added:
“While the Turkish government is taking a tougher stance on cryptocurrencies, an example of which includes its recent ban on cryptocurrency payments, it is imaginable that cryptocurrency investors in the country will not be able to continue their recent success. “
The company also noted that when we look at the gains made over a long era, we can see that investors in “at most all countries recorded the largest increases towards the end of the year. “That’s when U. S. traders/investors “really broke away from the package, with the maximum of their profits coming from activity on Coinbase,” the Chainalysis team noted.
According to the company’s observations, those gains were “driven through a strong accumulation in bitcoin value that began in mid-October 2020 and accelerated in mid-December. “During this period, the value of BTC accumulation increased from just $11,471 on October 14 to $29,111 on December 31, 2021.
As noted through Chainalysis, bitcoin’s value continued to rise until January 8, 2021, when it declined until early February 2021, when it rose again, reaching a record point of approximately $65,000 in April. “
But the “slope” of the “realized” profit curve in the United States in this era “suggests that U. S. investors sold at higher prices, while those in other countries had more,” the Chainalysis report notes.
As discussed in the report:
Our research of Bitcoin’s earnings across the country in 2020 deserves to be encouraging for the cryptocurrency world. The knowledge suggests that Bitcoin has given emerging market investors access to a high-yield asset, which they might not have had access to otherwise. On the other aspect of the currency, it also suggests that countries looking to restrict the use of cryptocurrencies through strict regulations are preventing their citizens from seized the opportunity.