What the numbers say: Bitcoin (BTC) trading volume in the U.S. dollar (USD) has declined by nearly one-third since November 2022 when FTX, previously the third-largest crypto exchange, filed for bankruptcy. The platform's collapse caused many countries, including the U.S., to tighten their regulatory approach towards the crypto industry to tackle the risks regarding digital assets. The increased scrutiny of the crypto market probably reduced investor interest, creating a risk perception. Bitcoinity's data has shown that leading cryptocurrency Bitcoin's trading volume in the U.S.' legal tender, USD, decreased to $582,000, down from $1.48M in November last year.
Details: The data has an important place, especially since Bitcoin is the cryptocurrency with the highest ownership rate among U.S. crypto investors. According to the data compiled by Statista and Measure Protocol, 83% of the investors in the country held Bitcoin in their portfolio as of February 2023, a higher percentage than any other crypto asset.
Relevance: Cathie Wood-led investment management firm Ark Invest's analyst Yassine Elmandjra recently estimated that the U.S. could lose its leading position in the global crypto industry to the countries embracing crypto, such as the United Arab Emirates (UAE), South Korea, Australia, and Switzerland, mainly due to its strict regulatory glance. Elmandjra cited CoinMetrics' data showing that Bitcoin's daily trading volume in the U.S. declined by 75% from $20B in March to just around $4B last week, adding that crypto liquidity in the country significantly dropped. The firm analyst concluded these findings by pointing out that the regulatory uncertainty in the U.S. seems to be discouraging both existing industry players and new entrants.
Brands that should care: The tightened regulatory environment in the U.S. forced many crypto-related companies, including Coinbase, Gemini, Marathon Digital, and Strike, to intensify their global expansion plans, embarking on a quest for alternative markets. Most recently, Coinbase launched a new Bermuda-based international derivatives exchange for institutional crypto traders outside the U.S., and its executive team visited the UAE for strategic development in the region after entering a legal conflict with the U.S. Securities and Exchange Commission (SEC). Another U.S.-based crypto exchange Gemini also recently launched a crypto derivatives platform that only caters to users outside the U.S. The U.S.-based crypto mining firm Marathon Digital made similar moves by increasing its initiatives in different parts of the world, including Abu Dhabi and Paraguay, while Strike moved its headquarters to El Salvador from the U.S., citing the anti-crypto regulatory environment in its native.