Hello and welcome to this week's Overbit News. In our weekly issue, we discuss how Defi and large Institutions dominate crypto in India and nearby regions. According to a top blockchain research group, the area might soon become a regional centre for Bitcoin investments.
Per a report published Monday by Chainalysis, India could soon become a hub for cryptocurrency-related investments in the Central, Southern Asia and Oceania (CSAO) region, driven by institutional investors and rapidly expanding decentralised finance (DeFi) activity once its government provides more explicit regulatory guidance.
The CSAO region received more than $572.5 billion in cryptocurrencies between July 2020 and June 2021, making it the world's fourth-largest cryptocurrency market by crypto transaction value, trailing only Central, Northern, and Western Europe, North America, and East Asia.
According to Chainalysis, DeFi is the critical driver behind CSAO's quickly growing crypto market. Trading volume on prominent DeFi protocols like Uniswap, Instadapp, and dYdX has risen in the last few years, with India leading the growth in DeFi adoption in CSAO.
Most of the country's cryptocurrency activity is concentrated in ether and wrapped ether, both of which are mainly used for DeFi transactions. According to Quantstamp's Sriram, DeFi activity dominates India's crypto sector since centralised exchanges have become more difficult to utilise due to increased governmental scrutiny.
Consumers, according to Sriram, want quicker access to cryptocurrency marketplaces. "The crypto market in India is similarly controlled by massive institutions, in contrast to Vietnam and Pakistan, which are geared at retail investors."
According to Chainalysis, transactions valued at more than $10 million accounted for 42 per cent of transactions sent from India-based addresses between July 2020 and June 2021, compared to 28 per cent for Pakistan and 29 per cent for Vietnam.
The blockchain data firm classifies cryptocurrency transactions worth more than $10 million as "large institutional" activities. Professional traders are driving the crypto markets in Vietnam and Pakistan, with crypto transactions between $10,000 and $1 million accounting for the majority of transactions in those two countries.
In short, it appears that out of all the rapidly growing CSAO regions, India seems to be pulling the largest percentage in terms of institutional cryptocurrency investors, though its demand on the retail side appears to be growing as well.
Looking back to Chainalysis' first analysis published last week, Central, Northern, and Western Europe had become the world's largest crypto economy, with over $1 trillion in transactions over the same 12-month period. In June 2021, institutional transactions in Europe totalled $46.3 billion, up from $1.4 billion in July 2020.
While Europe leads in crypto transactions, Asian countries lead overall adoption as assessed by on-chain value received, on-chain retail transactions, and peer-to-peer transaction volumes. As previously reported by Cointelegraph, emerging markets in Asia, Africa, and South America are turning to Bitcoin and other digital assets to battle hyperinflation, capital controls, and harsh foreign exchange laws.
That's it for this week's edition of Overbit News! Thanks for reading, and we'll see you next week.