US Investors Dominated Bitcoin Gains in 2020
US crypto investors raked in more than USD 4bn in realized bitcoin (BTC) gains in 2020, more than three times the gains made by Chinese investors, at USD 1.1bn, followed by crypto traders from Japan, the UK, and Russia, according to blockchain analysis company Chainalysis. That said, the report shows traders in a number of countries exceeding their states’ economic performance in terms of gains from the cryptocurrency.
While China historically has by far the highest raw cryptocurrency transaction volume, the US-focused exchanges reported immense inflows last year that appear to have been realized toward the end of 2020, likely accounting for the country’s major gains from bitcoin trade, according to the report.
The "steepness" of the US realized gains curve during the end of 2020 and early 2021 "suggests American investors sold at higher prices, while those in other countries held more," according to the analysts.
Other countries whose investors placed them in the top ten include Germany, France, Spain, South Kora, and Ukraine, respectively.
One of the factors that draws attention is the number of countries which appear to be “punching above their weight” in bitcoin gains when compared to their rankings in traditional economic metrics, Chainalysis said.
“While Vietnam has seen extraordinary economic growth over the last 20 years, cutting its poverty rate from over 70% to below 6% since 2002, the country ranks 53rd in [terms of its gross domestic product] (GDP) at [USD] 262 billion and is categorized as a lower-middle income country by the World Bank. However, Vietnam has a high level of grassroots cryptocurrency adoption, ranking tenth overall on our Global Crypto Adoption Index,” per the report.
Other examples of such countries include the Czech Republic, which ranked 54th in terms of its GDP at USD 251bn, but is 18th in realized bitcoin gains in 2020 at USD 281m; Turkey which ranked 25th and 16th, respectively; and Spain, which ranked 19th and 9th, respectively.
In contrast, bitcoin investors in some countries which enforced tight regulations on cryptocurrencies punched below their weight last year, as demonstrated by the example of India, a country with a population of about 1.4bn which has the world’s fifth largest GDP - but was ranked only 18th last year in terms of its BTC investment gains, at USD 241m.
This was less than the gains realized by investors in the mentioned Czech Republic, a country of about 11m. But it could also be a result of India's unfriendly stance towards crypto, and this may be the path Turkey is on now as well.
“Overall, our analysis of bitcoin gains by country in 2020 should be encouraging for the cryptocurrency world. The data suggests that bitcoin has given investors in emerging markets access to a high-performing asset, the likes of which they may not have otherwise had access to,” the report said.
It concluded that “on the other side of the coin, it also suggests that countries attempting to limit cryptocurrency usage through harsh regulations are preventing their citizens from taking advantage of the opportunity.”