Americans got richer off bitcoin than any other country last year — pocketing $4.1 billion in profits as the price of the volatile cryptocurrency soared to $29,000 from under $10,000, according to a new analysis.
The US was followed by China, which cashed out some $1.1 billion in profits in 2020, according to data published Monday by blockchain firm Chainalysis.
Japan came in third with $900 million, followed by the United Kingdom with $800 million and Russia with $600 million
The figures only cover realized gains, meaning that profits still held in cryptocurrencies or in exchange accounts are not included.
According to Chainalysis, Americans appear to have stepped up their bitcoin investments last year, despite nationwide lockdown orders and record unemployment. US crypto investors then cashed out toward the end of the year when the price of bitcoin has soared more than three times its $9,000 price tag.
“US-focused exchanges saw huge inflows in 2020 that appear to have been realized toward the end of the year, which likely accounts for the country’s large gains,” the analysts wrote.
But many people who sold bitcoin in late 2020 probably wish they had held on for longer. Bitcoin continued its eye-watering bull run through April of 2020, peaking at $63,000 — more than double 2020’s high point.
The cryptocurrency has slumped back near 2020 levels in recent months — hovering at about $33,000 Tuesday morning after declining 10 percent in just one week, according to Coindesk data.
While cryptocurrency profits can be hard to track due to the currencies’ intentionally decentralized nature, Chainalysis produced its estimate by collecting data including deposits, withdrawals and web traffic from cryptocurrency exchanges like Coinbase.
Last year, other countries that realized large gains from bitcoin include Germany and France with roughly $600 million each and Spain with $500 million. South Korea, Ukraine, the Netherlands, Canada and Vietnam all booked about $400 million in profits each.
Bitcoin’s 2021 woes have been attributed to a number of factors, including the US government’s ability to recover the bitcoin ransom from last month’s Colonial Pipeline hack. That has been cited as evidence that the cryptocurrency is more traceable than previously thought, potentially decreasing its value to certain investors.
The cryptocurrency market, which was once dominated by bitcoin, has also been complicated in 2021 by the rise of NFTs and heightened interest in alternative digital coins like Ethereum.