Source: Chainalysis; Compiled by Wuzhu, Golden Finance
As in previous years, North America remains the world’s largest cryptocurrency market, with an estimated $1.3 trillion in on-chain value between July 2023 and June 2024, accounting for approximately 22.5% of global activity.
North America’s dominance in the cryptocurrency market is largely driven by institutional activity – more so than any other region. About 70% of the region’s cryptocurrency activity involves transfers of more than $1 million, reflecting the growing influence of major financial players in the region’s cryptocurrency market.
This activity is overwhelmingly driven by the United States, with 2024 proving to be a critical year for cryptocurrency adoption and industry growth in the country.
The North American cryptocurrency industry has made a remarkable recovery after enduring a bear market spurred in part by the FTX crash in late 2022 and the collapse of Silicon Valley Bank in March 2023. In March 2024, the price of Bitcoin (BTC) surpassed $73,000, setting a new all-time high, marking a recovery from a period of continued volatility, ultimately strengthening the integrity and resiliency of the ecosystem.
The convergence of traditional finance (TradFi) and cryptocurrencies has solidified in 2024, with the launch of spot Bitcoin exchange-traded products (ETPs) in the U.S. market reinforcing institutional enthusiasm. In particular, exchange-traded funds (ETFs) — the most popular and well-known type of ETPs — have attracted the attention of both retail and institutional investors.
The cryptocurrency environment in North America has more substantial institutional momentum than ever before. Established financial entities such as Goldman Sachs, Fidelity, and BlackRock, which have influenced U.S. and global financial markets for decades, are now taking a prominent position in the cryptocurrency space. This marks a key maturity point for the industry as cryptocurrency becomes increasingly mainstream.
The United States is the most important pillar for global cryptocurrency adoption
The U.S. cryptocurrency market is the largest and most influential in the world, far ahead of the rest of the world.
This prominence stems in large part from the country’s vast wealth, large population, deep and liquid capital markets, and thriving innovation ecosystem. The U.S. also benefits from political stability, a favorable investment climate, and the dollar’s current status as the main reserve currency of the international financial system. Supported by these factors, the U.S. is a global leader in cryptocurrency adoption, ranking fourth in our annual Global Adoption Index.
The US market is significantly more volatile than the global market in terms of growth. In recent quarters, the US has shown a high sensitivity to both bull and bear markets. When cryptocurrency prices are rising, the US market grows more than the global market, while the opposite is true when the cryptocurrency market is falling. We can see this trend below, comparing the growth rates of the US and global markets with the returns of Bitcoin.
Much of this volatility can be attributed to significant levels of institutional activity within the country, a trend that has made the U.S. market a key driver of global financial trends such as cryptocurrencies and TradFi.
Meanwhile, the U.S. is becoming the world’s leading user of centralized services in the cryptocurrency space, reflecting a growing reliance on centralized finance (CeFi) platforms like Coinbase and Gemini for custody and asset management.
Growing demand for crypto-related financial products such as ETPs (which we’ll explore in more detail below) will likely drive demand for CeFi.
Centralized exchange institutional head and custodian Gemini stressed the importance of making digital assets accessible to everyday users via centralized platforms. “At Gemini, we’re in the abstraction business — our job is to simplify crypto-native technology so that anyone with a mobile phone can securely access digital assets,” she explained.
Additionally, the entry of institutional giants such as BlackRock into the crypto space highlights the growing convergence of TradFi and crypto. To gain insight into this development, we spoke with Kevin Tang from BlackRock’s Digital Assets team. BlackRock’s foray into digital assets has been carefully planned — including BTC and ETH ETPs and tokenization — with strategic CeFi partnerships setting the stage for its success. For example, in 2022, BlackRock partnered with Coinbase to integrate Coinbase Prime functionality into the company’s proprietary investment management platform, Aladdin. This integration enables BlackRock and its clients to seamlessly manage Bitcoin and Ethereum risk alongside traditional assets. “Platform integrations are critical to building foundational functionality, ultimately paving the way for the construction of IBIT [iShares Bitcoin Trust],” Tang explained.
Centralized platforms will likely still play a key role in driving the ongoing TradFi-cryptocurrency convergence. “CeFi and centralized institutions are critical to driving the development and provision of infrastructure that enables companies like BlackRock to operate in the [crypto] space,” Tang stressed.
US Markets Drive Global Prices as ETPs Solidify Crypto Ties with TradFi
As we have explored in other global cryptocurrency markets, the launch of spot Bitcoin ETPs in the U.S. in January 2024 had a transformative impact on U.S. and global cryptocurrency markets, driving institutional interest and bringing unprecedented inflows to BTC.
Following SEC approval, the market immediately experienced a global price bull run, resulting in massive positive returns just weeks after launch.
While it is impossible to completely isolate the impact of the launch of Bitcoin ETPs in the United States, it is widely believed that ETPs have contributed to bullish market sentiment and increased institutional BTC exposure. This wave of demand is attributed to the ability of ETPs to meet the needs of both retail and institutional investors, providing a familiar, regulated tool to gain BTC exposure while avoiding the complexity of managing private wallets or using crypto-native infrastructure.
The launch of a Bitcoin ETP in the U.S., followed a few months later by an Ethereum spot ETP, marked a key moment in TradFi’s convergence with cryptocurrencies, primarily as it impacted institutional interest and broader market sentiment. The cryptocurrency market has experienced significant gains as the Bitcoin ETP was approved in the United States.
To gain more insight into the impact of this milestone, we asked Kevin Tang of BlackRock, whose iShares Bitcoin Trust (IBIT) has become the most popular BTC ETP, to discuss its implications. “The launch of the U.S. Bitcoin ETP is historic and speaks to the pent-up investor demand for a low-cost, efficient and secure way to invest in Bitcoin.” IBIT has broken several records, including being the fastest ETP to reach $10 billion and the record for assets under management (AUM) of $20 billion. “We have high expectations for asset collection through the Bitcoin ETP, and the strong client interest we have seen so far represents a win for ETF wrappers,” said Tang.
In the first 200 days of its launch, the inflows into the US Bitcoin ETF far exceeded even the most popular gold ETF in history, making it the most popular ETP category in history.
This rapid adoption confirms the strong underlying demand for regulated, institutional-grade products that provide access to BTC.
The impact of the US Bitcoin ETP is not just a US phenomenon, it has far-reaching implications and is also setting the stage for a wider wave of adoption internationally. Tang noted that the product has attracted investments from Asia, Europe and Latin America. “The global impact of these ETPs is undeniable”. Tang further emphasized that Bitcoin is increasingly being viewed as a global currency alternative and a unique diversification tool for portfolios, especially as a potential hedge against inflation or geopolitical instability – a point echoed in BlackRock’s recent white paper on the unique value proposition Bitcoin offers investors.
Growing acceptance of BTC and ETH as assets worthy of serious investment paves the way for broader institutional adoption. Tang noted that many investors are now having deeper discussions about the role of BTC and other crypto assets in their portfolios. “They are asking how Bitcoin fits into a portfolio alongside other traditional investments,” he said, noting that the launch of ETPs has opened the door to wider access to cryptocurrencies. “ETPs have shifted the conversation to the investment merits and value proposition of BTC and ETH, rather than just the logistical challenges of how to access them,” Tang explained.
For many institutions, Bitcoin ETPs are the first step toward deeper participation in the cryptocurrency market. This exposure could eventually lead to broader investments in blockchain technology and decentralized finance (DeFi), far beyond exposure to BTC and ETH prices. “Right now, we are focused on BTC and ETH because we see demand and regulatory clarity,” he explained. “We remain committed to meeting the needs of our clients as the market evolves.”
Through ongoing efforts to educate investors and build trust in the space, traditional financial institutions (FIs) such as BlackRock are playing an important role in reshaping the way institutions approach cryptocurrencies, laying the foundation for wider adoption in the future. As Tang said, “We firmly believe in the potential of blockchain technology, and tokenization in particular, to disrupt traditional finance.”
Stablecoin growth stagnates in the U.S. market
Despite record activity, the U.S. market has also faced some challenges over the past year, including a notable departure of stablecoin activity from U.S.-regulated platforms. This trend may reflect the hurdles posed by the slow progress of regulation of stablecoins and digital assets more broadly.
The share of stablecoin trading on U.S.-regulated exchanges has been growing steadily through 2023, in line with increasing global stablecoin adoption. However, by 2024, this trend begins to reverse, as shown below.
Given the surge in stablecoin adoption in emerging and global markets, this shift may reflect a relative rather than absolute decline in stablecoin usage within the U.S. market. More stablecoin trading now occurs on exchanges not regulated by the U.S., suggesting that global stablecoin adoption is outpacing growth in the U.S. Below, we can see U.S.-regulated and non-U.S.-regulated exchanges are growing, but non-U.S. exchange markets are growing faster in stablecoin activity.
As noted above, this shift does not necessarily indicate a sharp decline in U.S. market participation, but rather a rapidly expanding role for stablecoins in emerging and non-U.S. markets.
To further understand the evolving stablecoin market, we spoke to Circle, the issuer of USDC, a stablecoin pegged to the US dollar. Circle highlighted the growing demand for dollar-backed assets around the world, especially among those outside the traditional banking system who have limited access to stablecoins.
“One way to think about the near-term opportunity for USDC is to look at the global demand for fiat U.S. dollar cash,” a Circle spokesperson explained. “The Federal Reserve estimates that nearly $1 trillion in U.S. banknotes (45% of all paper money in circulation) are held outside the United States, with two-thirds of $100 bills circulating abroad. This demand exists despite the difficulties people outside the United States face when trying to access dollars through their local banking systems.”
The growth in stablecoin usage outside the U.S. reflects a broader trend where international markets facing currency volatility are turning to dollar-denominated stablecoins to preserve value and facilitate faster, cheaper transactions. Stablecoins such as USDC and USDT (Tether) offer a compelling solution to gain access to the stability of the U.S. dollar without using traditional banking channels, which are often more difficult to access outside the U.S.
Nonetheless, regulatory uncertainty in the U.S. is threatening the country’s leadership in the stablecoin space. Circle noted that the lack of clear U.S. regulations has allowed other financial centers such as the European Union (EU), the United Arab Emirates (UAE), Singapore, and Hong Kong to attract stablecoin projects with more favorable regulatory frameworks. The spokesperson noted: “Europe has succeeded in doing what the U.S. has yet to do with the MiCA framework: providing legal and regulatory clarity for the entire digital asset market.” The Markets in Crypto-Assets Regulation (MiCA) comes into effect in June 2024 and lays the regulatory foundation for stablecoins in the EU.
Regulatory clarity outside the U.S. is driving the growth of stablecoins around the world, while the U.S. risks falling behind. “The lack of a regulatory framework for U.S. dollar stablecoins poses a threat to U.S. interests,” a Circle spokesperson warned. “This vacuum spurs the growth of stablecoins outside the U.S., where demand for the dollar is greater.” The opportunity cost for the U.S. is not just missing out on the economic activity associated with stablecoins, it also risks losing influence and authority over the future role of the dollar in on-chain commerce. This is not unlike the historical precedent of the Eurodollar, which initially received little attention from U.S. policymakers due to its small market size. However, the Eurodollar grew rapidly and helped solidify the dollar’s international role — fortunately for lawmakers. The same may not be true for stablecoins if the U.S. continues to lag in providing transparency.
Still, despite regulatory delays, Circle remains optimistic about USDC’s potential in the U.S. They added: “The U.S. is the home of the dollar and Circle’s home market, and we are bullish on USDC’s potential here.” However, as more countries develop regulatory frameworks to encourage stablecoin adoption, especially in regions where inflation and instability fuel demand, U.S. policymakers are under increasing pressure to act. “A key question now is whether the U.S. will ultimately enact its own stablecoin rules, or maintain the uncertain status quo, which U.S. policymakers from both parties have said is unacceptable,” they said.
The U.S. is not completely without progress on stablecoins. Circle points to the House Financial Services Committee’s July 2023 stablecoin bill, which could provide the regulatory clarity the U.S. market needs to remain competitive. “Congress should approve this bill on a bipartisan basis,” they urged. “Establishing clear AML/CFT and sanctions obligations for stablecoin issuers is critical to ensuring that U.S. stablecoins maintain their global influence.”
Canada market follows the US
Although the Canadian market is smaller than the U.S. market, it remains a major player in the North American market, generating approximately $119 billion in value between July 2023 and June 2024.
While Canadian markets closely follow U.S. trends, volatility tends to be lower, with more modest gains during bull markets and milder declines during bear markets.
Canada closely tracks global averages in terms of asset distribution and deal size.
To understand the reality of the Canadian cryptocurrency landscape, we spoke with Kunal Bhasin, Partner and Co-Head of Advisory Services at KPMG’s Digital Assets Center of Excellence. Bhasin provided insights into the state of cryptocurrency adoption in Canada, as well as some of the challenges facing the industry.
Following regulatory changes implemented last year that introduced stricter rules on custody, leverage, and stablecoins, several major Canadian crypto businesses have suspended operations in the country, with Gemini joining Binance and OKX as the latest exchanges to exit the market. However, Bhasin said the trend stems from more than just regulatory challenges. “Canadian regulators have provided more clarity to crypto exchanges than other North American jurisdictions by introducing the concept of crypto contracts, which clarifies the applicability of securities regulations to crypto platforms,” he explained. He believes the exchanges’ exits may stem from broader business decisions rather than an unworkable framework. Nonetheless, Bhasin stressed that Canadians still have “many regulated venues where they can participate in crypto in a meaningful way.”
While Canada’s regulatory framework for trading platforms and investment funds helps maintain some confidence, gaps remain — particularly when it comes to the regulation of stablecoins and DeFi. “Canada’s regulatory approach to stablecoins is somewhat different from the approach taken by other forward-thinking jurisdictions such as the EU, UAE, Hong Kong and Singapore,” Bhasin explained. “There is no clear regulatory framework for stablecoins. As a result, you may see stablecoin issuers leave Canada and related cryptocurrency innovation move outside of Canada.”
Despite these obstacles, Bhasin spoke of promising developments. The Canadian Investment Regulatory Organization (CIRO) is a pan-Canadian self-regulatory organization that currently regulates all investment dealers, mutual fund dealers, and trading activities in Canada's debt and equity markets. Under this framework, cryptocurrency exchanges must become members of CIRO, which subjects them to stricter disclosure, internal control, and regulatory reporting requirements. "This is a sign of the maturing regulatory environment for cryptocurrency companies in Canada," Bhasin said.
Another challenge to cryptocurrency adoption in Canada is the reluctance of major financial institutions to meaningfully engage with cryptocurrencies. “Major banks around the world have taken appropriate steps to understand the unique risks of cryptocurrency companies under banking supervision and have incorporated enhanced due diligence programs related to cryptocurrency businesses, which are a new source of deposits for these banks. However, we have not seen Canadian banks take similar steps,” Bhasin explained. “This has made it difficult for cryptocurrency companies to obtain banking services, resulting in some innovation moving outside of Canada.” Additionally, he noted that major Canadian banks have cryptocurrency teams and have conducted various pilot programs and proofs of concepts, however, “leadership tends to push back when it comes time to move beyond these pilots,” he said, attributing this to risk aversion and a preference to maintain existing business models rather than disrupt them with new, potentially risky crypto ventures.
A big driver of global cryptocurrency adoption is the proactive stance of governments, such as Singapore and the UAE, which are making cryptocurrencies part of their economic strategies. Bhasin said greater government involvement could spur growth and investment. “More involvement is needed at the federal level to make digital assets a priority industry in Canada,” he said.
Despite the challenges facing Canada’s cryptocurrency market, Bhasin is optimistic about the future, especially given the continued efforts of the public and private sectors. “Canada still has a strong regulatory environment for certain cryptocurrency activities such as investment funds,” said Bhasin, noting that Canada was the first country to launch a collateralized ETH ETF. “There is potential to develop this further by providing a clear roadmap for primary and secondary markets for tokenized real-world assets,” he added. “If the government makes cryptocurrency a priority and we continue to make progress in the regulatory space, there is no reason why Canada cannot take its place as a global leader in cryptocurrency adoption.”
The future of cryptocurrency in North America depends on a balance between institutional momentum, regulatory clarity, and innovation
The outsized influence of North America, and the United States in particular, on the global cryptocurrency market is undeniable. Driven by the introduction of ETPs and the evolving TradFi-crypto convergence, the region’s dominance during this period has significantly shaped the domestic and international crypto landscape. As Gemini’s Claire Ching noted, “Institutional adoption has taken on a different flavor during this cycle. After the stunning fall of FTX in the last cycle, it has been more cautious and required more diligence. With this level of attention and resources, institutional commitment to the space is firmly cemented.”
Institutional giants like BlackRock are no longer just experimenting — they’ve made full investments, demonstrating how cryptocurrencies have moved from the fringe to mainstream financial conversations. Speaking about this paradigm shift, BlackRock’s Kevin Tang expressed the importance of “the continued view of blockchain as a transformative technology that has the potential to disrupt traditional paradigms and value chains — not only in finance, but more broadly across industries and sectors.”
Despite the momentum, challenges remain. Regulatory uncertainty in the United States and Canada, coupled with the shift in stablecoin market share outside North America, underscores the need for balanced innovation, clear regulatory frameworks, and continued institutional support to ensure continued growth and stability across the crypto industry.
