• The US is losing its market share in the crypto industry due to regulatory uncertainty.
• CryptoQuant research shows that more than half of the bitcoin held by firms for customers has moved to offshore and international exchanges.
• Regions like the EU and Hong Kong have developed comprehensive regulations, resulting in an inflow of capital, talent, and digital asset firms.

Regulatory Uncertainty Drives Crypto Assets Offshore

The U.S. is losing its crypto market share as regulatory uncertainty drives firms and assets offshore. Due to unclear regulations in the United States, more than half of the bitcoin (BTC) that crypto firms hold for their customers has moved to offshore and international exchanges. According to a CryptoQuant research report shared with CryptoPotato, BTC reserves on U.S.-based crypto exchanges are down to 2017 levels, as they are being lost to non-U.S. platforms.

Offshore Exchanges Dethrone US Crypto Platforms

The significant decline in BTC reserves on American exchanges stems from the absence of a clear rule book for the crypto industry. Regulators have resorted to an enforcement-based approach, driving crypto firms to offshore locations such as the EU and Hong Kong which have developed comprehensive regulations for this nascent economy enabling an inflow of capital, talent, and digital asset firms into these regions while US based exchanges are gradually losing their market share in this emerging sector due to de-dollarization heightening up.

Exchanges Exit US Market Due To Regulatory Violation Accusations

Several exchanges have decided to exit the U.S., with others ceasing certain products and services due to violation accusations from regulators who lack a clear rulebook governing cryptocurrency related activities within their jurisdiction resulting in many companies deciding to move abroad where there is clarity regarding laws regarding cryptocurrency trading activities or other related businesses thereby avoiding potential conflicts with authorities due to lack of clarity about local rules & regulations concerning cryptocurrencies..

Comprehensive Regulations Draw In Capital And Talent

Regions like the EU and Hong Kong which have adopted “same activity same risks same regulation” principle akin traditional financial institutions are seeing an increasing number of investors moving their funds away from US based entities towards foreign companies providing better protection & transparency thus resulting in increased inflow of capital & talent within these jurisdictions relative stability when it comes cryptocurrency related activities encouraging further investment & growth within these countries as compared with those following enforcement based approach like US where uncertainty reigns supreme leading a stampede outwards .

Conclusion: De-Dollarization Spreads Within Cryptocurrency Industry

Overall it appears that regulatory uncertainty concerning cryptocurrencies within US is leading investors towards other jurisdictions which provide more clarity & transparency regarding rules & regulations governing cryptocurrency related transactions ultimately leading towards de-dollarization spreading throughout entire industry .

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