Chainalysis: 2023 Global Cryptocurrency Market Revenue Overview

Original title: "2023 Cryptocurrency Gains by Country"

2023 is a year of recovery for the cryptocurrency market. After experiencing many challenges Beyond 2022, asset prices and market sentiment both improved over the course of the year. But how are investors actually doing? In this article, we will share our estimates of cryptocurrency returns in 2023 based on investor interactions with centralized exchanges, including a breakdown of estimated returns by country.

Our Method: How to Calculate Cryptocurrency Returns and Estimate Returns by Country

We use on-chain data to estimate investors’ cryptocurrency returns based on crypto asset inflows and outflows Liquidity of services where crypto assets can be transferred into or out of fiat currencies. Specifically, we first measure on-chain macro flows for a selected set of assets that represent approximately 80% of the total market capitalization of all cryptocurrencies and trade on major centralized exchanges that provide crypto-to-fiat conversion services. We then estimate the collective total return for each asset by measuring the difference between the dollar value of all withdrawals for that asset and the value of all deposits for that asset. This approach is based on the fact that any deposits made to offer offline withdrawal services have the potential to be converted into cash, thereby realizing any gains or losses on that asset. While this approach is not perfect, it provides us with a strong estimate of returns for popular assets traded on centralized exchanges.

Once we use this method to estimate the earnings on crypto assets for users of each service we track, we then allocate these earnings based on each country’s share of web traffic on each service’s website to various countries. This approach, which combines transaction data and network traffic, is also the framework we use to calculate the Global Cryptocurrency Adoption Index.

Estimated Total Cryptocurrency Returns in 2023

Overall, we estimate total returns for all cryptocurrency investors in 2023 to be $37.6 billion.

While this total is well below the $159.7 billion in gains during the 2021 bull market, it is a significant rebound from the $127.1 billion loss estimate for 2022. Interestingly, our estimate of total returns for 2023 is lower than for 2021, despite similar growth rates in crypto asset prices in both years. One possible explanation is that investors in 2023 are less likely to convert crypto assets into cash because they expect prices to rise higher, as prices in 2023 did not exceed the previous all-time high at any time, which would One thing is different from 2021.

Cryptocurrency gains had been relatively steady throughout the year before two consecutive months of declines in August and September. Gains have since risen sharply, with gains in November and December dwarfed by previous months.

2023 Cryptocurrency Revenue Estimates by Country

In 2023, the United States is far ahead in cryptocurrency revenue, expected to reach $9.36 billion, and the United Kingdom ranks second, with cryptocurrency revenue of approximately $1.39 billion. .

Interestingly, we also see that residents of some upper-middle-income and lower-middle-income countries appear to have achieved excess gains, especially in Asia, where estimated gains in Vietnam, China, Indonesia and India are all in excess of US$1 billion. Ranked in the top six of all countries. As we pointed out in the 2023 Cryptocurrency Geography Report, countries in these income categories, especially low- and middle-income countries, have high rates of cryptocurrency adoption and have remained remarkably resilient even during the recent bear market. Our return estimates suggest that many investors in these countries have benefited from embracing this asset class.

What will happen in 2024?

The positive trend from 2023 so far has continued into 2024, with well-known crypto assets such as Bitcoin hitting all-time highs amid the approval of Bitcoin ETFs and increased institutional adoption. If these trends continue, we may see earnings more consistent with 2021. As of March 13, Bitcoin was up 65.4% in 2024, and ETH was up 70.2%.

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