The United States is facing a critical challenge in the race for cryptocurrency dominance, as countries such as the United Arab Emirates, Korea, Australia, and Switzerland are emerging as strong contenders, warns Yassine Elmandjra, an analyst from Ark Invest.
In a recent communication to Ark Invest clients on May 22, Elmandjra highlighted the cryptocurrency market’s decline due to uncertain regulations, citing trading firms Jane Street and Jump Trading as early indicators of this trend.
The once thriving crypto ecosystem in the US, which boasted well-established and reputable institutions, now finds itself grappling with a void that is likely to deter institutional investors from showing further interest. Elmandjra stated,
Regulatory uncertainty in the US appears to be discouraging both existing players and new entrants in the crypto industry.
Ark Invest, a global asset management firm led by CEO Cathie Wood and managing over $14 billion in assets, acknowledges that liquidity for cryptocurrencies within the US has significantly diminished. Elmandjra pointed out that Bitcoin trading volume in the US has plummeted by 75% in the past two months, dropping from $20 billion per day in March to a mere $4 billion in the previous week, as reported by CoinMetrics.
As the US becomes increasingly hostile towards digital assets and the associated companies, several crypto firms based in the US are actively exploring alternative options. Coinbase, currently engaged in a legal battle with the US Securities and Exchange Commission due to regulatory ambiguities, is considering the United Arab Emirates as a potential “strategic hub” for its operations.
Other major firms are also eyeing the UAE as an attractive destination, given its favorable regulatory approach towards digital assets. Saqr Ereiqat, the co-founder of venture-building firm Crypto Oasis, expressed that the UAE’s positive stance on digital assets positions it as an ideal location for both existing and new crypto businesses