Regions like the EU and Hong Kong, which have developed comprehensive regulations for the nascent economy, are experiencing an inflow of capital, talent, and digital asset firms. Hong Kong, in particular, has opened up to crypto companies and stated that they would adopt the “same activity, same risks, same regulation” principle for entities akin to traditional financial firms.
In addition, CryptoQuant’s research found that the market cap of U.S.-based stablecoins has plummeted by 35%, losing $15 billion so far in 2023. Meanwhile, the U.S. remains the world’s dominant player in the Bitcoin mining industry. However, the country could lose that position due to bad regulation, as the government is targeting miners with the possibility of higher taxes. The U.S. is losing its crypto market share as regulatory uncertainty drives firms and assets offshore.
The decline in BTC reserves on American exchanges and the market cap of U.S.-based stablecoins shows that the country is gradually losing its market share of emerging and existing sectors as de-dollarization heightens. The trading volume of international crypto exchanges is four times greater than that of U.S.-based platforms. Bitcoin’s spot trading volume dominance in the U.S. has fallen below 2017 levels and is currently at 21%. American exchanges have little-to-no exposure to perpetual futures trading markets, which have a volume of 11x that of spot trading volume, as firms are not allowed to offer the service.
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