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Breakout year for crypto as trade surges 550% to reach $15.8 trillion

·1-min read
A bitcoin ATM  (PA Archive)
A bitcoin ATM (PA Archive)

Cryptocurrency trading volumes surged last year to rival some major currencies, a new report shows.

Chainalysis, a US crypto data company, said cryptocurrency transactions rose 550% last year to reach $15.8 trillion, equivalent to daily volumes of around $43 billion. That would put daily crypto turnover on a par with foreign exchange dealings for the Danish krone and more than the Polish zloty, according to data from the Bank for International Settlements.

The surge in trading came in a year when Tesla founder Elon Musk helped drive a rally in dogecoin by Tweeting memes, crypto-enabled NFTs grew from almost nothing to a $41 billion market, and bitcoin reached a new all-time high. 2021 was a banner year for the emerging sector.

While last year was a breakout for crypto, 2022 has had a rougher start. Bitcoin is in a bear market and fell another 6.8% overnight to reach $46,163, its lowest level since September. It came as tech and other growth stocks sold off sharply in the US amid rate rise fears.

Chainalysis’ data on the market size was included in its latest Crypto Crime report, which measures illicit activity in the sector. Crypto crime hit a new all-time high last year, with $14 billion linked to fraud and theft. That was up from $7.8 billion in 2020.

However, much stronger growth for the broader market meant criminal proceeds as a percentage of the overall space fell to a record low of just 0.15%. The figure stood at 3.3% just two years ago.

Chainalysis said: “The yearly trends suggest that with the exception of 2019 — an extreme outlier year for cryptocurrency-based crime largely due to the PlusToken Ponzi scheme — crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving.”

Criminals continue to exploit emerging areas, the company said, such as decentralised finance, which grew rapidly last year.

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