The crypto industry in the United States, which previously had participation from reputable and reliable organizations, is now experiencing a gap that could discourage other institutional investors and new entrants from getting involved with the industry.
Ark Invest, an investment management firm led by Cathie Wood, recently warned that the United States risks losing its position as a leading crypto hub if it fails to provide clear regulatory guidelines for digital assets.
According to a published note by Ark Invest analyst Yassine Elmandjra, the lack of clarity around digital asset regulation in the United States has made it difficult for companies to innovate and has created a regulatory environment that is less conducive to growth and investment and therefore hampering the growth of the burgeoning industry.
This is evident from the decreased Bitcoin trading volume in the country as well as the reduced involvement of trading firms such as Jane Street and Jump Trading in the domestic U.S. market. Data from the analytical platform CoinMetrics as quoted by Elmandjra reveals that the daily Bitcoin (BTC) trading volume dropped from $20 billion to about $4 billion in March representing a 75% fall.
Countries Boosting Crypto Attractiveness
Additionally, Elmandjra warns that the US risks losing its position as a leader in the cryptocurrency race to other countries such as the United Arab Emirates (UAE), Australia, South Korea, and Switzerland. These countries have become more proactive in providing clear regulatory frameworks for digital assets. This positive approach has attracted investment and innovation in the sector.
The UAE, for example, has been very progressive in its approach to digital assets as it has launched various blockchain-based initiatives in industries such as finance, healthcare, and transportation. The UAE government also launched the Emirates Blockchain Strategy which aims to make the country a global leader in blockchain technology.
Likewise, the South Korean government has been actively working on a regulatory framework for digital assets by passing a law requiring all cryptocurrency exchanges to register with the Financial Services Commission and to comply with anti-money laundering regulations.
Meanwhile, Australia and Switzerland are not left behind as both countries have become leaders in providing a clear regulatory framework for digital assets, thereby attracting many crypto and blockchain companies to set up operations in the country. In all, should the United States want to remain competitive in the crypto sector, it needs to provide clearer regulatory guidance for digital assets.
