Analysis

Bitcoin Reserves Fall To 2017 Levels, The U.S. Loses Its Crypto Market Share

Key Points:

  • More than half of the Bitcoin Reserves that crypto firms hold for their customers has moved to offshore and international exchanges due to unclear regulations in the United States.
  • The decline in BTC reserves on American exchanges is due to the absence of a clear rule book for the crypto industry. Regulators have resorted to an enforcement-based approach, driving crypto firms to offshore locations.
  • The U.S. is losing its crypto market share as regulatory uncertainty drives firms and assets offshore, with the decline in BTC reserves on American exchanges and the market cap of U.S.-based stablecoins plummeting by 35%, losing $15 billion so far in 2023.
Bitcoin reserves on U.S.-based crypto exchanges have fallen to 2017 levels, according to a report by CryptoQuant. The report suggests that more than half of the BTC that crypto firms hold for their customers has moved to offshore and international exchanges due to unclear regulations in the United States.

The decline in BTC reserves on American exchanges is due to the absence of a clear rule book for the crypto industry. Regulators have resorted to an enforcement-based approach, driving crypto firms to offshore locations. As a result, several exchanges have decided to exit the U.S., with others ceasing certain products and services due to violation accusations.

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.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Thana

Coincu News

Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.

Recent Posts

Bitcoin Spot ETF Inflows Hit $1 Billion Led By BlackRock

Bitcoin Spot ETF inflows hit $1.005B on Nov 21, led by BlackRock’s $608M and Fidelity’s…

11 minutes ago

Best Altcoins to Buy Today: Qubetics Rides 1000x Potential to Hit $2.6M, Ethereum Stays Rangebound, Tron USDT Transactions Hit $52B

Discover the best cryptos to buy and hold today: Qubetics leads with 1000x potential, Ethereum…

2 hours ago

Trump Media Company Is Pushing New Venture For Crypto Service

With the platform facing a cracked whip, Trump Media company is expanding into new business…

3 hours ago

Crypto Advisory Council Now A White House Position Attracting Leaders

Major crypto firms, including Ripple, Kraken, and Circle, are competing for spots on President-elect Donald…

4 hours ago

Analyst Sounds Major Breakout Alert Amid Shiba Inu, WallitIQ, And Dogecoin Price Recoveries

Analysts highlight a breakout alert as Shiba Inu (SHIB), and Dogecoin show signs of recovery…

4 hours ago

SEC Chair Gary Gensler Will Lose Power From January 20

SEC Chair Gary Gensler will step down on January 20, 2025, coinciding with President-elect Donald…

4 hours ago

This website uses cookies.