• Due to unclear regulations, US-based crypto companies have decreased by more than 50%. 
• A CryptoQuant research report shows that the number of crypto exchanges in the US has gone back to 2017 levels as others migrate to offshore and international exchanges.

There is a rampant decrease in BTC reserves on US-based exchanges due to unclear crypto regulations in the country. Due to the unclear laws, regulators are using the enforcement-based approach, driving crypto exchanges away. 

Crypto exchanges are opting for international and offshore ventures. Regions such as Hong Kong and European Union countries have developed solid regulations for the growing industry and are experiencing an influx of talent, capital, and new digital asset firms. Hong Kong has opened its economy to digital asset companies and announced that they would employ the “same activity, same risks, same regulation” principle to the crypto firms, similar to traditional businesses. 

Several crypto firms have exited the American market altogether, while others have cut back some products due to violation accusations. As de-dollarisation rises, the US is gradually losing its emerging and existing digital asset sectors.

Over 50% of ETH Outside the US

Besides the decreasing US BTC reserves, ETH reserves have declined steadily. About 56% of ether on crypto firms are held outside the US. 

The trading volumes in international exchange platforms are more than four times that of US-based exchanges. Bitcoin’s spot trading volume dominance in the US is 21 percent, lower than the 2017 levels. US-based exchanges are experiencing limited information on perpetual futures trading markets, more than 11 times that of spot trading volumes. 

In contrast, Asia’s future and spot trading volumes have grown by more than 20% and 30%, respectively. 

The CryptoQuant’s report said that the U.S.-based stablecoins market cap has decreased by 35%, recording a loss of $15 in 2023.

On the flip side, the US is still a leading contributor to Bitcoin mining. However, there are speculations that the shaky regulations might drive the miners away. The American government is targeting Bitcoin miners with the possibility of increased taxes. The country is also losing its share in the crypto market as firms are moving their assets offshore. 

Also read: Coinbase vs. SEC: Legal Bombshell Unleashed as Congress Gears Up for Crypto Legislation Showdown