North America: Dominant Cryptocurrency Market
North America has emerged as the leading cryptocurrency market, with an estimated on-chain value of $1.2 trillion between July 2022 and June 2023, accounting for 24.4% of global transaction activity during this period, according to a report by Chainalysis.
Crypto and DeFi Decline in North America
Data shows that while North America has been a major adopter of decentralized finance (DeFi), its share of DeFi activity has decreased significantly over the past year. Chainalysis attributes this decline to the speculative nature of many DeFi protocols, which tend to be the first choice for investors looking to divest in unfavorable market conditions. Additionally, regulatory uncertainty within the US market has also contributed to the slowdown of DeFi in North America.
“Though challenging, developing such regulation is imperative as DeFi has many useful real-world applications like trading, asset management, lending, and payments, to name just a few.”
Chainalysis suggests that the decline in crypto activity in North America is part of a global trend of decreasing transaction volume and grassroots adoption.
North America’s Crypto Landscape
North America’s crypto landscape has experienced a shift from high-profile advertisements and celebrity endorsements in 2022 to a more uncertain 2023 marked by regulatory delays and scrutiny of established industry players. The US has been particularly affected.
In May 2022, the collapse of LUNA wiped out nearly $60 billion from the crypto market, causing significant losses for those who had benefited from its rapid rise. Then, in November 2022, revelations led to the downfall of FTX exchange and its founder Sam Bankman Fried, who is currently facing trial in the US.
Hot Take: North America’s Crypto Market Faces Challenges and Opportunities
Despite the decline in transaction volume, North America still holds the fourth position in Chainalysis’ 2023 Global Crypto Adoption Index. As the region recovers from the impact of recent events, regulatory measures will play a crucial role in shaping its future. Developing clear regulations for DeFi and other crypto-related activities is essential to unlock the full potential of these technologies and ensure their widespread adoption.
Source: CryptoPotato
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