Crypto Dominance Shift: US Risking Global Standing to These Countries
According to a note by Yassine Elmandjra, an analyst at Ark Invest, the United States is facing the risk of relinquishing its prominent position in the global crypto ecosystem to several countries, such as the United Arab Emirates, South Korea, Australia, and Switzerland.
Elmandjra highlighted a significant decline in crypto liquidity within the United States. Notably, trading firms like Jane Street and Jump Trading have scaled back their involvement in the domestic US market.
He expressed concern that the current void in the US crypto ecosystem might deter institutional investors previously attracted by well-established and reputable institutions.
Elmandjra referenced data from CoinMetrics, revealing a 75% decrease in bitcoin trading volume in the US from $20 billion per day in March to approximately $4 billion last week. He also pointed out that the price of bitcoin on Binance.US was $600 higher compared to other exchanges, indicating weaker price discovery in the US.
The uncertainty surrounding regulations in the US appears to discourage both existing and potential players in the crypto industry, according to Elmandjra’s analysis.
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Coinbase, a prominent crypto exchange, recently visited the UAE, expressing its belief in the country’s potential as a strategic hub for its operations. Meanwhile, back in the US, Coinbase has launched an aggressive lobbying campaign, forming an advisory council consisting of former US lawmakers and airing TV commercials in the nation’s capital.
The UAE has garnered attention from miners as well. Marathon Digital announced earlier this month that Abu Dhabi would be hosting the first large-scale Bitcoin mining operations in the Middle East. Fred Thiel, the CEO of Marathon Digital, warned that President Joe Biden’s proposed tax on miners could drive firms to seek opportunities outside the US.
Source: The Block