North America Leads in Cryptocurrency Usage Despite Regulatory Uncertainty
According to a report by blockchain forensics firm Chainalysis, North America is the world’s largest cryptocurrency market, with approximately $1.2 trillion in on-chain value received between July 2022 and June 2023. This represents 24.4% of global transaction activity during that period. The report also highlights that institutional investors play a significant role in driving North America’s crypto market, with nearly 77% of transaction volume attributed to transfers of at least $1 million.
United States Dominates North American Crypto Market
The United States is the main driver of cryptocurrency activity in North America, accounting for a significant portion of the transaction volume. Canada also contributes significantly to the region’s crypto market. Overall, North American crypto activity has declined due to negative events like the collapse of FTX and issues with crypto-friendly banks in the U.S., leading institutional investors to withdraw from the market.
Decline in Stablecoin Usage
Stablecoin usage in North America has decreased, dropping from over 70% to below 49% of on-chain transaction volume between February and June 2023. Activity has shifted to non-U.S. licensed platforms. While stablecoins pegged to the U.S. dollar remain widely used, Chainalysis notes that more users are engaging in stablecoin-related activities with platforms and issuers based outside the U.S.
Falling Share of Decentralized Finance (Defi) Activity
Although North America remains a leader in defi usage, its share of global defi activity has significantly declined during the examined period. On-chain activity in the region is evenly split between defi and centralized exchanges.
Potential for Growth with Increased Regulation
Chainalysis suggests that on-chain crypto activity in North America has started to gradually increase since June 2023. The company believes that regulation will play a crucial role in the region’s crypto market recovery. However, the current regulatory approach by U.S. authorities, which relies on enforcing existing rules through courts rather than implementing crypto-specific regulations, has led major U.S. players to explore expansion opportunities outside the country.
Hot Take: North America Remains a Dominant Force in Crypto Despite Challenges
Despite ongoing regulatory uncertainty and declining stablecoin and defi activity, North America continues to lead in terms of cryptocurrency usage. Institutional investors have played a significant role in driving the region’s crypto market, with the United States being the primary driver. However, negative events and a lack of clear regulatory guidelines have resulted in an overall decline in crypto activity in North America. To ensure sustained growth, increased regulation is necessary, but the current approach taken by U.S. authorities may push major players to seek opportunities elsewhere. The recovery and future success of the North American crypto market depend on effective regulation and a favorable regulatory environment.
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