As a researcher with extensive experience in the field of cryptocurrency and blockchain technology, this report on the rising decentralized finance (DeFi) activity in Eastern Europe, particularly Ukraine, has piqued my interest. Having closely followed the evolution of crypto adoption in this region, I must admit that I am not surprised by these findings. The resilience and adaptability of Eastern European societies, especially in the face of adversity, have always been a testament to their innovative spirit.
Activity associated with decentralized finance is growing significantly in Eastern Europe, indicating ongoing acceptance of cryptocurrencies, as reported by the blockchain analysis platform Chainalysis.
Eastern Europe received over $499 billion worth of cryptocurrency between July 2023 and June 2024.
Approximately one-third of the region’s cryptocurrency transaction volume was attributed to Decentralized Finance (DeFi), amounting to over $165 billion, as revealed by the Chainalysis Crypto Adoption Report dated October 30.
In simple terms, the Eastern European region now ranks as the fourth-biggest global player in the cryptocurrency market. With a combined worth exceeding $499 billion, this region represents more than 11% of the total global value of cryptocurrencies traded around the world.
The proposal indicates that a broader use of cryptocurrencies in retail sectors, particularly in Eastern Europe, might attract fresh funds towards the crypto market.
Yet, despite growing DeFi activity, centralized cryptocurrency exchanges (CEXs) remain the main beneficiaries, receiving over $324 billion of those digital asset transactions.
Institutional transfers fuel crypto growth in Ukraine
As a crypto investor, I’ve noticed that when it comes to crypto transaction value within Eastern Europe, Russia and Ukraine take the lead. It’s quite striking how, amidst ongoing conflicts and international sanctions against Russia, the adoption of cryptocurrencies in these two nations continues to be “remarkable.” This underscores the resilience and adaptability of the crypto market, even under challenging circumstances.
Russia took in more than 182 billion dollars through cryptocurrency transactions, making Ukraine, with its inflow of around 106 billion dollars, the second largest crypto receiver in the region.
As a researcher delving into the cryptocurrency landscape of Ukraine, I’ve observed that the expansion of our market has been significantly fueled by institutional and professional shifts. Notably, in the year 2024, according to Chainalysis, the bulk of transactions were large institutional transfers exceeding $10 million and mid-sized transfers ranging from $1 million to $10 million.
In spite of the ongoing conflict, regional cryptocurrency exchanges continue their operations. For example, WhiteBIT holds a robust position within Ukraine and other platforms are active too. According to a representative from WhiteBIT, they communicated this to Chainalysis.
“Institutional and professional crypto transfers in Ukraine have surged as many seek financial stability amid the ongoing war, with cryptocurrencies viewed as a safer alternative… This trend is influenced by global factors like market volatility, inflation, and war-related sanctions, alongside growing institutional interest in Bitcoin ETFs from firms such as BlackRock.”
Over the past year, I’ve noticed a substantial increase in Bitcoin (BTC) acquisitions made with the Ukrainian hryvnia, reaching an impressive figure of approximately $882 million.
Bitcoin transaction activity has risen following a significant 26% inflation rate observed in the Ukrainian currency, the hryvnia, by the end of 2022. This inflation rate subsequently decreased at the start of 2024.
As a researcher, I’ve come across insights from Chainalysis indicating that Ukrainians could be leaning towards Bitcoin as a potential form of value storage.
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2024-11-01 12:32