Decentralized finance (DeFi) activity is on the rise in Eastern Europe, highlighting a significant increase in cryptocurrency adoption, according to the latest report from on-chain analytics platform Chainalysis. Between July 2023 and June 2024, the region received over $499 billion in cryptocurrency, with DeFi accounting for a substantial third of that value, totaling more than $165 billion.
This surge has positioned Eastern Europe as the fourth-largest cryptocurrency market globally, contributing over 11% of the total crypto value received worldwide. The report indicates that the rise in retail adoption of cryptocurrencies could inject new capital into the crypto ecosystem, further driving growth in the region.
Despite the notable increase in DeFi activities, centralized cryptocurrency exchanges (CEXs) continue to dominate, benefiting the most from these transactions. CEXs received over $324 billion of the total crypto flows in Eastern Europe, underscoring their pivotal role in the market.
Among the countries in Eastern Europe, Russia and Ukraine lead in terms of crypto transaction value. The report notes that crypto adoption remains "remarkable" in both nations, even amidst the ongoing conflict and international sanctions against Russia. Russia alone received over $182 billion in crypto flows, while Ukraine recorded more than $106 billion, placing it second in the region.
In Ukraine, institutional and professional transfers have been key drivers of market growth. Chainalysis reports that large institutional transfers exceeding $10 million, as well as mid-sized transfers ranging from $1 million to $10 million, accounted for a significant portion of transactions in 2024.
Local CEXs are still active in the region, with exchanges like WhiteBIT maintaining a robust presence in Ukraine. A spokesperson from WhiteBIT stated, “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 such as market volatility, inflation, and sanctions, alongside a growing institutional interest in Bitcoin ETFs from firms like BlackRock.
The report also highlights a significant increase in Bitcoin purchases using the Ukrainian hryvnia, which surpassed $882 million over the past year. This uptick in Bitcoin transactions can be attributed to the hryvnia experiencing over 26% inflation in December 2022, although inflation rates slowed by early 2024. Chainalysis suggests that many Ukrainians may be turning to Bitcoin as an alternative store of value amid economic uncertainty.
As Eastern Europe continues to embrace cryptocurrency and decentralized finance, the region is poised for further growth, driven by both institutional investments and retail adoption. The dynamics within this evolving landscape underscore the resilience of cryptocurrencies, even in challenging geopolitical climates.
November 2024, Cryptoniteuae