The U.S. Regains Dominance in Cryptocurrency
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As the horizon of 2025 approaches, the global cryptocurrency landscape is experiencing a seismic shift, with the focus gravitating back towards the United StatesA prominent figure, often referred to as the “strongest advocate” for cryptocurrency, has assumed a significant role, rallying the global financial community to invest heavily in American cryptocurrency exchangesHis ambition to transform the U.Sinto the “capital of cryptocurrency” and a “bitcoin superpower” is driving an unprecedented demand for novel digital asset funds, including Bitcoin and Ethereum exchange-traded funds (ETFs) as well as cryptocurrency derivatives.
This surge in interest and investment has sparked a renewed fervor for cryptocurrency trading, with a particularly noteworthy increase in activity following the surprising success of Bitcoin ETFs that launched in early 2024. This instruments have not only revitalized market trading volumes; they also propelled Bitcoin’s price to reach an impressive milestone of $100,000, a point once regarded as mythical among investors.
The United States has now emerged as a pivotal player in the realm of cryptocurrency liquidity and pricing benchmarks for assets such as Bitcoin
Previously, it seemed that Asia was the sole beneficiary of governmental crackdowns on cryptocurrency, but the tide is swiftly turning as America reclaims its leadership in this dynamic market.
Over the past year, marked as a transformative period in the cryptocurrency sector, the structural changes within this market have become evidentThe surge led by the U.Shas not only encouraged trading activities but has solidified Bitcoin’s position above the historic $100,000 thresholdData suggests a notable concentration of large Bitcoin transactions occurring during American trading hours, pointing to a shift in market dynamics.
According to statistics from Kaiko, the share of daily Bitcoin-to-USD transactions conducted during American trading hours has risen sharply from approximately 40% in 2021 to around 53%. Thomas Elders, a product head at CF Benchmarks, noted that institutional investments in cryptocurrencies, spearheaded by major asset management firms on Wall Street, have transformed American markets into the new center for cryptocurrency liquidity.
Moreover, the trading scales for ETFs have seen remarkable growth since the successful launch of Bitcoin ETFs on the U.S
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stock market in JanuaryCumulatively, these Bitcoin ETF products surpassed $500 billion in daily trading volume, with net inflows reaching approximately $36 billionAmongst these, BlackRock’s “iShares Bitcoin ETF” has made history as one of the most successful ETF offerings in the stock market’s history.
Looking ahead, Wall Street analysts are expressing optimism regarding the vast potential expansion of cryptocurrency ETFs, predicting that by January next year, the number of options available may exceed the current offerings limited to Bitcoin and Ethereum.
As this interest and investor enthusiasm gain momentum, regulatory measures within the U.Smay shift towards a more favorable stance on cryptocurrencies, with forecasts suggesting that Bitcoin prices could see new peaks by 2025.
Reflecting on the total market cap of the cryptocurrency sector, which recently shattered the $3.2 trillion mark, it is noteworthy that this value has outstripped that of Microsoft, one of America’s tech giants
Among global equities, this positions the cryptocurrency market right after the likes of Nvidia and Apple, outpacing industry leaders without exception such as Amazon, Google, Meta, Tesla, and Saudi Aramco.
With this backdrop, Wall Street anayslsts are brimming with anticipation for a new wave of investmentsBernstein’s analyst team recently published a prediction report suggesting stronger support for the growth of cryptocurrency markets, anticipating that Bitcoin's price could soar to $200,000 by the end of 2025. “We foresee that Bitcoin will eventually replace gold as the primary ‘store of value asset’ in the coming decade, establishing itself as a staple within multi-asset portfolios of investment firms and a standard in corporate financial management,” they explained.
This bullish outlook aligns with projections from Standard Chartered Bank, whose global head of digital assets research, Jeff Kendrick, had accurately predicted Bitcoin’s ascent to the $100,000 mark this year
Kendrick suggests that Bitcoin could similarly reach around $200,000 by the conclusion of 2025.
Furthermore, demand for Bitcoin and Ethereum futures trading continues to surgeThe Chicago Mercantile Exchange (CME), which is a major futures trading platform, has reported an unprecedented volume of open contracts for Bitcoin and Ethereum, reflecting a robust market appetite for these assets.
The increased number of open contracts signifies the level of investor engagement in the market, indicating heightened optimism for the future price trajectories of Bitcoin and EthereumThe CME now holds the top position in terms of Bitcoin futures open contracts, having supplanted Binance, which previously dominated the crypto futures trading space.
Additionally, the scope and depth of the cryptocurrency market are expanding as liquidity recoversRecent statistics reveal that liquidity levels have rebounded to pre-collapse heights experienced during the “FTX crisis,” a crucial period that severely impacted market stability.
In the fallout of 2022, the total collapse of Alameda Research had a damaging effect on cryptocurrency liquidity
However, the successful rollout of Bitcoin ETFs in the U.Sand the ensuing wave of investment enthusiasm have significantly mitigated the negative impacts and steered the market towards recovery.
The stablecoin market has also experienced a resurgence, indicative of the current enthusiasm in cryptocurrency investments, overshadowing a previously cautious sentimentFollowing the infamous “stablecoin collapse” triggered by TerraUSD, which devastated market confidence, the stablecoin market capitalization has now rebounded, reaching new heightsAccording to DeFiLlama, stablecoins globally grew by 46% in market value this year, surpassing $190 billion, reclaiming a record previously held during the Terra era.
Furthermore, the metrics that measure “market depth” within the cryptocurrency ecosystem have showcased substantial growthThis suggests that the market can accommodate relatively large orders without significantly impacting trading prices, reflecting an improved ability to absorb high volumes without instigating excessive volatility