United States topped the charts with an estimated realized gain of $49.95 billion, followed by the United Kingdom (UK) with estimated realized gains of $8.16 billion. The US topped the UK by about a wide margin of 575 per cent.

NEW DELHI: 2021 was a milestone year for cryptocurrencies, wherein virtual digital assets such as Bitcoin, Ethereum and many more bluechip crypto tokens scaled new life highs.

Thanks to this rally, investors around the world realized total gains of $162.7 billion in 2021, compared to just $32.5 billion in 2020, shows data released by crypto analytics firm Chainalysis.

But investors from which countries have added the most wealth? Answering the questions surrounding the theme, Chainalysis has released data for the second year in a row. This year, it has moved beyond Bitcoin and added more crypto tokens in its report.

Geographical analysis in cryptocurrency is difficult due to the technology’s decentralized nature. Chainalysis has attempted to estimate this through a combination of transaction data and web traffic data.

In its Global Crypto Adoption Index, derived through its methodology, the Chainalysis has included as many as 50 countries.

United States topped the charts with an estimated realized gain of $49.95 billion, followed by the United Kingdom (UK) with estimated realized gains of $8.16 billion. The US topped the UK by about a wide margin of 575 per cent.

Germany ($5.82 billion), Japan ($5.51 billion) and China ($5.06 billion) were other names in the top 5 countries in estimated realized gains, the data suggested.

Jennifer Lu, Cofounder at Coinstore said the exponential increase in crypto profits in 2021 underlines the fact that crypto as an investment class has performed better than the traditional asset class. “We strongly believe that a homogenous global regulatory framework for cryptos is the need of the hour as it will fast-track the adoption of crypto-related products and services,” she added.

Chainalysis analyzed that many emerging market countries have embraced cryptocurrency for remittances and as a response to currency devaluation.

In 2021, China’s total estimated realized cryptocurrency gains were $5.1 billion, up from $1.7 billion in 2020, for a year-over-year growth rate of 194 per cent. China’s lower growth rate most likely reflects a decline in the country’s cryptocurrency activity following government crackdowns.

India did not even make it to the top 20 names. It stood at 21st position with an estimated realized gain of $1.85 billion, lagging behind Asian peers such as Turkey, South Korea and even Vietnam.

Shivam Thakral, CEO of BuyUcoin, said, “It’s a great encouragement for crypto community across the globe to see that crypto investors have made handsome profits by putting their faith in crypto assets.”

India with crypto gains of around $1.8 billion is impressive despite the regulatory fluctuations, he added. India has the potential to be numero uno in the crypto gains if the industry is nurtured by a healthy regulatory framework, according to Thakral.

Anndy Lian, Chairman, BigONE Exchange said Vietnam’s cryptocurrency investment performance is the one that surprises me most.
Turkey ranked 11th in GDP at $2.7 trillion but sixth in realized cryptocurrency gains at $4.6 billion, whereas Vietnam ranks 25th in GDP at $1.1 trillion but 16th in realized cryptocurrency gains at $2.7 billion.

War hit Ukraine ranks 40th in GDP at $576 billion but 13th in realized cryptocurrency gains at $2.8 billion, whereas the Czech Republic ranks 47th in GDP at $460 billion but 19th in realized cryptocurrency gains at $1.9 billion.

Ethereum, meanwhile, was the most noteworthy gainer among the crypto assets, the study suggested. Ethereum edged out Bitcoin in total realized gains globally at $76.3 billion.

Chainalysis believes 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 it as their primary currency.

While most individual countries follow this pattern, there are some notable exceptions, it said in the blog.

Japan 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.

“Ethereum being one of the most popular coins in the world just edged out Bitcoin in total gains. This is a close call in my opinion. Based on on-chain analysis, the overall gains should be fairly equal,” said Lian from BigOne.

“2021 that is mostly led by the Defi trend could be the main catalyst for Ethereum,” he added. “For 2022, we may be seeing Solana, Avalanche and Cronos rising up the ranks.”