Ethereum Brought Investors The Highest Crypto Gains In 2021

In a new research paper, blockchain analytics firm Chainalysis examined the profits people around the world were making from crypto. Ethereum was the cryptocurrency with which people made the most profit. Crypto investors made $162.7 billion in profits worldwide in 2021. That’s a 400% increase from 2020’s $32.5 billion.

The 2021 Cryptocurrency Gains by Country Chainalysis report breaks down crypto gains by coin and country. According to the analysis company, the developments in Ethereum were the “most striking trend”. The Ethereum price increased by 400% in 2021, while the Bitcoin price only increased by 62% in 2021. This is another reason for this dynamic.

Total realized gains for Ethereum were slightly higher than Bitcoin during this period. Ethereum profits totaled $76.3 billion globally, compared to $74.7 billion for Bitcoin. The analyst team attributes this to the surge in demand for DeFi as Ethereum is the global standard for it: “We believe this reflects the increased demand for Ethereum as a result of DeFi surge in 2021 as most DeFi protocols are based on the Ethereum Blockchain built and using Ethereum as primary currency.”

The total capitalization of the crypto market increased by 196% or $1.54 trillion in 2021. Year-to-date, the total market cap is down 13.7%, according to CoinGecko. Around $320 billion has left the market since Jan. 1, bringing the figure to just over $2 trillion today.

Experts attribute the drop in 2022 to several factors, including the US Federal Reserve raising interest rates as it seeks a recovery in the US economy. However, some economists believe that the central bank could fail and this could have a positive impact on the crypto markets.

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