North America Is Leading Crypto Market Despite Regulatory Challenges

In the most recent report from Chainalysis, the United States continues to be a global leader in crypto usage, despite regulatory challenges and various adverse events. In the North American region, Canada ranks second and is positioned seventh globally in terms of crypto adoption.

Chainalysis notes that nearly 77% of crypto transaction volume in North America consists of transfers amounting to $1 million or more. This statistic underscores the region’s reliance on institutional investors and major industry players.

Nevertheless, over the past year, North America has confronted issues that have impacted its crypto market activity. These challenges include the collapse of FTX and a banking crisis, leading to the closure of banks that had been supportive of digital assets, such as Signature, Silicon Valley Bank, and Silvergate. The primary factor contributing to the decline in activity has been the outflow of institutional funds, while professional traders and retail investors have maintained their trading volumes.

The report also highlights a decrease in the usage of stablecoins in North America, although they continue to be the most favoured form of crypto assets.

Concurrently, U.S. regulators are actively pursuing tighter oversight over digital assets. In September, David Hirsch, the head of the crypto asset and cyber unit within the SEC division of enforcement, said about the possibility of lawsuits and investigations, particularly targeting decentralised financial projects (DeFi). This has had a negative impact on the popularity of DeFi services, resulting in a significant reduction in transaction volumes over the past year. Previously, the SEC filed a lawsuit against Binance, accusing the largest crypto exchange of violating securities trading rules.

Chainalysis experts believe that the introduction of crypto regulations in the United States will play a significant role in the market’s future. Despite some crypto companies departing the region, both Canada and the United States continue to lead in terms of digital asset adoption by the general population.