DeFi propels North America into the world’s second largest crypto market


The growth of decentralized finance (DeFi) has led North America to the second largest crypto market in the world, according to a new study from crypto intelligence firm Chainalysis.

  • North American addresses received $ 750 billion in crypto between July 2020 and June 2021, or 18.4% of global transactions. Central, Northern and Western Europe received $ 1 trillion during this period, or 25% of global volume, according to Chainalysis Cryptocurrency Geography Report 2021 find.
  • The monthly transaction volume in North America increased by more than 1000% between July 2020 and May 2021, from $ 14.4 billion to $ 164 billion.
  • Chainalysis attributed this growth to DeFi, which accounted for 37% of total transactions in North America between July 2021 and June 2021. The main exchange in the region during this period is decentralized Uniswap, followed by centralized Coinbase and decentralized dYdX.
  • The United States, the region’s largest market, topped Chainalysis’s DeFi Adoption Index, which measures “grassroots adoption” of DeFi.
  • North America and East Asia saw a slight decline in total transaction volume in May 2021. Lower activity in East Asia is likely due to Beijing’s further crackdown on cryptography, which began with a Council of State proclamation in May. China has historically been the world’s largest bitcoin mining country and a major hub for crypto trading.

East Asia has long lost its advantage

East Asia’s share in the global crypto transaction volume began to decline in April 2020, well ahead of this year’s crackdown on the industry by Chinese authorities, according to Chainalysis research.

  • As of April 2019, East Asia accounted for the lion’s share of crypto transactions globally, until June 2020 when it was overtaken by Central, Northern and Western Europe, as well. than North America, according to the report.
  • China accounted for 47% of those transactions between July 2020 and June 2021, Chainalysis economist Ethan McMahon told CoinDesk in an email interview.
  • Asked about the decline in East Asia’s share of global crypto transactions in April 2020, McMahon said that “China has been moving for some time towards an outright ban on crypto in favor of its own solutions, “adding that China has started testing its own central bank. digital currency during this month.
  • From July 2020 to June 2021, East Asian countries also lost several places in the Chainalysis Global Crypto Adoption Index; China fell from fourth place to 13th, South Korea from 17th to 40th, Hong Kong from 23rd to 39th, and Japan from 71st to 80th.
  • DeFi is also gaining ground in East Asia. Huobi is the most popular exchange in the region, according to research, followed by decentralized exchanges dydx and Uniswap.
  • Hong Kong is the region’s top DeFi adopter, accounting for 55% of transactions, followed by China at 49%, Japan at 32% and South Korea at 15%.

Mining

Since the Chinese State Council called for a crackdown on crypto mining in May, Chinese miners have moved their facilities overseas, primarily to North America, Central Asia, and South America.

  • Between May and June, Binance saw the biggest drop in bitcoin received from mining pools, over $ 200 million, Chainalysis said. Huobi saw the second largest net drop, at just over $ 150 million, followed by FTX at around $ 100 million.
  • This loss of liquidity could also explain the overall decline in activity in the region after May, the intelligence firm said.
  • North America’s share in the global mining hash rate more than doubled between late April and August, according to a study by the Cambridge Center for Alternative Finance. By August, China’s hash rate had fallen to practically zero, according to the center.
  • For non-China-based mining pools, revenue more than doubled between January and July 2021, Chainalysis said. Those based in China saw their incomes drop by 50%, according to the report.



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