The US has regained leadership in the cryptocurrency market thanks to the launch of an ETF and Trump's promises.
The United States has regained its leadership in the cryptocurrency market thanks to the launch of an ETF and Trump's promises. The United States has regained its prominence in the cryptocurrency sector after Asia claimed leadership of the sector for much of 2023.
The United States has regained leadership in the cryptocurrency market, reports Bloomberg. This came about thanks to Donald Trump's re-election as president, as well as growing demand for cryptocurrency derivatives and exchange-traded funds (ETFs).
The surge in activity in the digital currencies sector was prompted by the successful launch of a ETF on Bitcoin in the US in early 2024. In addition, Trump's victory, which promised to make America the 'cryptocurrency capital of the world', further fuelled enthusiasm in the US crypto market.
As a result, the US regained its relevance in the cryptocurrency sector, after Asia had dominated the industry for much of 2023. The region was a "big beneficiary" of the tough measures taken by the outgoing Joe Biden administration, which Trump intends to reverse, the publication writes.
According to journalists, several factors indicate that the activity of cryptocurrency market participants is now primarily concentrated in the United States. These include data on the time of day when cryptocurrency trading is most active, the trading volume of ETF shares, the interest in cryptocurrency futures in America, and the restoration of market depth.
The share of daily Bitcoin/dollar trading during the opening hours of US exchanges has grown from 40% in 2021 to around 53%. Analysts note that this shift in 'liquidity dominance' towards America has been caused by the growing participation of institutional investors.
The ETFs on Bitcoin in the US, launched in January of this year, recorded a combined daily trading volume of more than USD 500 billion, with net capital inflows of about USD 36 billion. The article's authors point out that the iShares Bitcoin Trust (IBIT) from BlackRock has become one of the most successful ETFs in history.
U.S. Approves ETFs on Bitcoin and Ethereum, Opening the Road to Other Cryptocurrency Funds
In 2024, ETFs on Bitcoin and Ethereum were approved in the United States. The industry expects ETFs on other cryptocurrencies to be launched under Trump's presidency. Applications have already been filed with the US Securities and Exchange Commission (SEC) for funds based on Solana, XRP, Litecoin, HBAR and blended ETFs.
Open interest (the number of open contracts) in Bitcoin and Ethereum futures on the Chicago Mercantile Exchange (CME) has reached a record this year. The CME now holds the No. 1 position for open interest in Bitcoin futures, while the market leader was previously the largest cryptocurrency exchange operating outside the United States, Binance.
The depth of the cryptocurrency market (the ability to execute relatively large trades without excessive impact on asset prices) has recovered to pre collapse of FTX and its affiliated hedge fund Alameda Research in 2022. The FTX collapse hit cryptocurrency liquidity hard, but the market was helped to recover by the launch of an ETF in the US and the optimism caused by Trump's victory, according to Bloomberg.
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