The country recorded the lowest cryptocurrency trading volumes in over 12 months last week. Some analysts have linked this situation to the pullback in trading from Jump and Jane Street.
The United States crypto influence looks to be slipping away with each passing day. The US has been a powerhouse in the crypto space for years now but is now at risk of losing that position to countries including Australia, the United Arab Emirates, Switzerland, and South Korea, according to Ark Invest analyst Yassine Elmandjra.
The United Arab Emirates (UAE) has been lurking behind in the crypto space for some years now, with recent developments around its crypto scene, set to propel the country into the limelight. Abu Dhabi was recently chosen to host the inaugural large-scale bitcoin mining operations in the Middle East through a collaboration with digital asset company Marathon Digital and Zero, a digital asset infrastructure firm.
Elmandjra, in his assertion, described the current regulatory uncertainty surrounding the US crypto scene as a major dent in the current US crypto grip. According to Elmandjra, the current regulatory uncertainty appears to be discouraging both existing firms and newcomers in the crypto space.
Elmandjra also highlighted a significant drop in crypto liquidity in the country, labeling it a major factor threatening US crypto influence. The country recorded the lowest cryptocurrency trading volumes in over 12 months last week, a situation that some analysts have linked to the pullback in trading from Jump and Jane Street.
Data obtained from the Block on May 17 indicated that the 7-day-moving average of cryptocurrency exchange volumes reached $12.84 billion, a steeper decline from the year’s early peak of almost $46 billion.
“Once populated by well-established and credible institutions, the crypto ecosystem in the US now faces a void that is likely to put interest among other institutional investors on hold,” he stated. Elmandjra added that “trading firms Jane Street and Jump Trading have reduced participation in the domestic US market.”
According to data from CoinMetrics, the daily volume of bitcoin trade has decreased by 75%, from $20 billion in March to about $4 billion last week. Additionally, last week’s bitcoin price on Binance.US was about $600 higher than on other exchanges, indicating weaker price discovery.
CEO of Ripple Brad Garlinghouse earlier last week also voiced his concerns about the current situation of cryptocurrencies in the United States. Garlinghouse claimed that even more cryptocurrency firms may be compelled to jump ship for “more progressive jurisdictions like Europe” if US regulators continue their crackdown on digital coins.
He described the current regulations as confusing, adding that the US crypto influence will keep dwindling if companies in the country keep hiring and investing in other countries.
His remarks came after the crypto company’s announcement on Wednesday that it had acquired Metaco, a Swiss cryptocurrency company.
Coinbase has currently stepped up its lobbying efforts by forming an advisory group made up of former MPs and sponsoring TV advertisements in the capital after its recent tussle with regulators.