Akk Invest published a report saying that the U.S. is at risk of ceding leadership in the cryptocurrency industry amid increasing regulatory pressure in the country.
The report noted that major trading firms, including Jane Street Group and Jump Trading, are reducing their presence in U.S. cryptocurrency markets in response to regulatory uncertainty and risks.
“Once populated by well-established and credible institutions, the U.S. crypto ecosystem now faces a void that is likely to suspend the interest of other institutional investors,” the report said.
As a result, cryptocurrency liquidity in the U.S. has significantly decreased and price volatility has increased.
According to CoinMetrics, bitcoin trading volume fell 75% from $20 billion a day in March to about $4 billion last week.
“In the U.S., regulatory uncertainty seems to be discouraging both existing firms and new entrants.
As a result, the U.S. risks losing ground to countries such as the UAE, South Korea, Australia and Switzerland,” Ark Invest analysts wrote.
Earlier, cryptopayment service Strike announced its decision to move its headquarters to El Salvador amid increasing pressure from U.S. regulators.
Also, U.S.-regulated crypto platform for institutional investors Bakkt is interested in entering the European market after the passage of the Cryptocurrency Regulation Act (MiCA).