Geography of Bitcoin Transaction Dynamics Report 2014 Q1 2021

The Crystal team regularly explores bitcoin and crypto market dynamics, to see how fund flows have been affected by external factors like financial fluctuations or increasing regulations. We update these dynamics quarterly on our interactive map and in our report (PDF attached).

In this latest update for Q1 2021 we looked at:

• The latest in FATF regulations and what’s coming for p2p exchange guidance
• The upcoming directives to be imposed by the 6th AML Directive in June 2021
• The evolution of crypto regulation and exchange flow dynamics 2014-2021

Here’s a summary of our key findings in the latest report update:

• By the end of Q1 2021, the countries with the largest number of registered exchanges were the UK (68 exchanges), Singapore (43 exchanges), the US (39 exchanges), and Seychelles (34 exchanges).
• Argentina (4 exchanges), Indonesia (4 exchanges), and South Africa (2 exchanges) have the fewest exchanges registered among the G20 countries.
• In 2014, 67% of all bitcoin transferred between exchanges was sent by exchanges from the G20. By Q1 2021 the volume of these transactions decreased to 34%.
• In Q1 2021, the total volume of bitcoin directly transferred between exchanges was almost $82.5 billion, an increase of 452% from the same period a year ago.
• In Q1 2020, the total volume of bitcoin directly transferred between exchanges was $15 billion. That’s 16% of the almost $93.8 billion transferred in all of 2020. 34% of the volume moved between exchanges in 2021 was transferred by G20 countries, while Seychelles transferred about 47% of the total volume of bitcoin exchanges in Q1 2021. (This volume is majoritively made up of transactions related to Binance and Huobi.)
• The share of EU bitcoin amounts transferred decreased from 10% in all of 2020 to 9% in Q1 2021. More specifically, the bitcoin amount sent by the EU in 2020 was $9.0b, and in Q1 2021 was $7.7b. The amount received by the EU in 2020 was $8.6b and Q1 2021 was $6.2b. While EU exchange transfers haven’t grown as rapidly as Seychelles or the British Virgin Islands, they do contribute significant amounts.

Geographic Observations for Q1 2021:

• Singapore and the US rank second and third by the number of registered exchanges.
• There are 49 exchanges with unknown countries of registration – nearly 11% of the total number of exchanges considered in this study.

Bitcoin flow dynamics in 2014 versus 2021 (due to changing regulatory trends):

• The total amount of transferred bitcoins by exchanges in all of 2014 was $1.4b. By Q1 2021, this amount had increased about 57X to $82.5b.
• In 2021 so far, the countries with the largest amount of international bitcoin transfers sent by their exchanges haven’t changed much: top movers are still Seychelles, the US, the EU, and the British Virgin Islands.

Predictions in Bitcoin Flow Dynamics for 2021 & Beyond:

• The total transferred amount by G20 countries during all of 2020 and Q1 2021 exceeds $35.8b and $28.4b respectively.
• The introduction of the FATF crypto “travel rule” will mean a further increase in compliance costs for exchanges, which is also expected to lead to a decrease in the total number of exchanges (or consolidation).
• The addition of P2P exchanges for FATF consideration may also see changes in the licenses and fund flows in the DEX industry. Though what these changes will look like will largely depend on the upcoming guidance to be formalized in June 2021.
• While 6AMLD only affects exchanges in EU countries, there are 27 countries that may affect bitcoin flow dynamics. The EU ranks third by amounts transferred overall.

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