2023 marked a year of recovery for cryptocurrencies, with asset prices rising and a better market outlook following a challenging 2022. Chainalysis has estimated the earnings obtained by cryptocurrency investors throughout 2023 by analyzing transactions on centralized exchanges and providing a detailed breakdown of estimated proceeds for each nation.
Total Estimated Cryptocurrency Earnings for 2023
According to Chainalysis estimates, cryptocurrency investors garnered total earnings of $37.6 billion in 2023.
While this figure is significantly lower than the $159.7 billion realized in 2021 during a bullish market phase, 2023 demonstrated a significant recovery compared to 2022, which saw estimated losses of $127.1 billion. It is interesting to note that total earnings for 2023 are lower than those in 2021, despite cryptocurrency prices growing at similar rates. One reason for this difference may lie in the fact that investors were less inclined to convert cryptocurrencies into cash last year, hoping that prices would surpass the historical highs reached in 2021.
Throughout the year, cryptocurrency earnings remained relatively steady until August, which, along with September, was the only month to record losses. Subsequently, earnings increased significantly, with November and December experiencing a strong uptrend.
Ranking of Estimated Cryptocurrency Earnings
The United States leads the rankings by a wide margin in 2023, with estimated profits reaching $9.36 billion. Considerably behind, the United Kingdom secured the second spot in this ranking, with estimated cryptocurrency earnings of $1.39 billion.
Moreover, investors from various middle- to low-income countries seem to have garnered disproportionate earnings, particularly in Asia: Vietnam, China, Indonesia, and India, for instance, all achieved over $1 billion in estimated earnings. This trend, as confirmed in Chainalysis’ 2023 Geography of Cryptocurrency Report, can be justified by the historically strong cryptocurrency adoption in countries within these income categories, especially in middle- to low-income countries, which remained particularly resilient even during the recent bearish market.
What Might 2024 Hold?
Thus far, the positive trends of 2023 have extended into 2024, with major assets like Bitcoin reaching all-time highs following Bitcoin ETF approvals and increased institutional adoption. If these trends continue, we may witness earnings more in line with those seen in 2021.
Appendix: Our Methodology
By analyzing on-chain data, we estimate cryptocurrency earnings realized by investors. The first step involves identifying cryptocurrency movements on exchanges that allow conversion of crypto into fiat currency. Specifically, we measure the on-chain macro flows of a selected group of assets, representing approximately 80% of the total market capitalization, traded on major centralized exchanges offering conversion services. Subsequently, we estimate the total collective earnings realized through each asset by measuring the differences between the US dollar value of withdrawals and deposits for that asset. Indeed, any deposit made on a platform offering off-ramping represents a potential conversion into cash, resulting in the realization of any gains or losses on the asset. While this analysis is not perfect, it provides a reliable estimate of earnings on the most popular assets traded on centralized exchanges.
Once the earnings realized by users are estimated, we allocate these profits to individual states based on the share of web traffic to each service’s site originating from each country. This combination of transaction data and web traffic allows us to calculate the Chainalysis Global Crypto Adoption Index.
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