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The U.S. is at risk of losing its lead in the global crypto ecosystem to countries such as the United Arab Emirates, South Korea, Australia, and Switzerland, Ark Investment analyst Yassine Elmandjra wrote in a note Monday.
In his analysis, Elmandjra pointed to a significant decline in cryptocurrency liquidity in the country.
“The U.S. cryptocurrency ecosystem, once dominated by established and reliable institutions, is now facing a void that may put interest from other institutional investors on hold,” he said, referring to trading firms Jane Street and Jump Trading. reduced participation in the US domestic market.
Citing data from CoinMetrics, Elmandjra noted that bitcoin trading volumes in the country fell 75% from $20 billion a day in March to about $4 billion last week. Last week, the price of bitcoin on Binance.US was $600 higher than on other exchanges, a sign of weak price discovery in the U.S., he said.
“In the U.S., regulatory uncertainty appears to be holding back both incumbents and new entrants in the crypto space,” he wrote.
The executive team of cryptocurrency exchange Coinbase, which has been critical of U.S. regulators, visited UAE earlier It also said this month that there was no doubt that the country “has the potential to become a strategic hub for the company”.
Back in the U.S., Coinbase launched an aggressive lobbying campaign with former U.S. lawmakers and run a tv ad in the nation’s capital.
UAE has also been gaining attention from miners, Marathon Digital said earlier this month Abu Dhabi will host the Middle East’s first large-scale bitcoin mining operation.
CEO Fred Thiel told The Block last week A proposal to tax miners, sought by President Joe Biden, would prompt companies to start looking abroad.
© 2023 The Block Crypto, Inc. All Rights Reserved. all rights reserved. This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.
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