Interest in bitcoin and cryptocurrencies really surged in America during the peak months of COVID, and now many traders in the United States are seeing that interest lead to profits. According to blockchain analysis firm Chainalysis, Americans have seen their bitcoin holdings return more than $4 billion to initial holders.
Americans Love Their Bitcoin
While bitcoin may be suffering pricewise at the time of writing, the currency has recently concluded what is arguably its largest and longest bull run in its 12-year history. During the month of March in 2020, the coronavirus pandemic began striking against global financial markets. The world suffered as the economy was forced to shut down, causing stocks and many businesses to fall to record lows.
Bitcoin itself suffered greatly. During that time, the currency – albeit briefly – fell below the $4,000 mark after it had been trading for more than $10,000 during the previous month, though just over a year later, the currency was trading at a new all-time high of approximately $64,000 per unit, suggesting the asset was enjoying a record comeback to say the least.
During this time, Americans were frantic due to inflation and the other financial problems their country was facing. They suddenly lost interest in fiat currencies and began turning to bitcoin, believing it was somehow a hedge tool against further economic problems. Today, the Americans that invested in bitcoin during the time of COVID have seen their investments grow by roughly $4.1 billion at press time. This is more than three times the amount of profit made by BTC investors in China, which saw only $1.1 billion in returns.
In a recent interview, Kim Grauer – director of research at Chainalysis – stated that one of the big contributing factors to such a large number was the fact that several institutions based in America found themselves quickly attracted to BTC. Kim states:
We know from past research that there is growing institutional investment in crypto assets, notably in the U.S. Institutional investors work with large quantities of cryptocurrencies and have been stockpiling bitcoin over the past year. The gains in the U.S. mostly came in toward the end of the year and, therefore, we suspect many institutional traders who fit this profile took in gains as the price rose in late 2020.
Kim further stated that many Americans who were investing in BTC had an exit plan, which also contributed to the high earnings they have seen. After America and China, Japan, the U.K., Russia, and Germany finished out the list of top six countries with the most bitcoin gains.
So Many Up-and-Down Countries
We can start to see country-level variations in the way gains are taken. For example, we know that certain countries with a robust cryptocurrency ecosystem, such as Vietnam, took in outsized gains given the overall size of the economy.