Finance

Crypto investors made $163 billion realized gains in 2021


It was a good year for cryptocurrency investors in 2021 as they took home $162.7 billion in realized gains in 2021, according to a report by popular blockchain analytics firm Chainalysis. This is up over 400% from the 32.5 billion realized gain seen in 2020.

As you would expect, the investors in the United States took the lion’s share of the profits, accounting for approximately $47 billion of the total realized gains which represents 29% of the total amount. These investors were followed by those in the UK and Germany taking the second and third spot, accounting for $8.1 billion and $5.8 billion respectively.

China, the country that banned cryptocurrency-related transactions in the second quarter of 2021 as well as bitcoin mining, came in 4th, which compared to 2020, came in second accounting for $1.1 billion, recording approximately $5 billion in 2021. This represents a 354.6% growth, despite the ban on cryptocurrency-related transactions.

What you should know

  • South Africa was the only African country to feature in the top 50, accounting for $827.6 million in realized gains. This represents 0.51% of the total realized gains. Nigeria did not feature.
  • A big majority of the gains, 93%, was made in bitcoin and ether, according to the report. It noted that there were more gains in ether than bitcoin, at $76.3 billion to $74.7 billion.
  • According to Chainalysis, the report is only a rough estimate of how much crypto investors made during the year because it’s based on on-chain analysis of moving funds, as opposed to knowing each individual’s trading performance.
  • Chainalysis said it tracks the difference between funds when they are deposited on exchanges and when they are withdrawn.
  • They further stated, “It’s not perfect — ideally, we’d be able to calculate gains at the individual or wallet level rather than at the service level, but this methodology still gives us a reasonable estimate of total gains for cryptocurrency users in a given country.”
  • The report also noted that it’s hard to break down the on-chain data by country, since blockchain transactions do not inherently contain geographical information. The estimates are based on Chainalysis’s transaction data and web traffic information.

The report concluded by stating, “Our analysis of cryptocurrency gains should be encouraging to the cryptocurrency world, and reflects the growth of the ecosystem in 2021 — especially in DeFi. While there are still risks the industry must work to mitigate, the data not only shows that crypto asset prices are growing, but also indicates that cryptocurrency remains a source of economic opportunity for users in emerging markets.”

This report only considers coins that Chainalysis tracks and does not address whether investors made other losses nor does it take into account taxes on the gains made.



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