In recent findings, North America, particularly the United States and Canada, has been identified as a major player in the global cryptocurrency market.
According to a report by Chainalysis, these two countries have contributed a staggering 24.4% to the global transaction activity in the past year.
This data reveals that from July 2022 to June 2023, the US alone saw a cryptocurrency trading volume that exceeded $1 trillion. When combined with Canada, the region accounts for almost a quarter of the global transaction volume.
A significant observation from the report is the role of large institutional investors in this surge of activity. These investors are the primary drivers, with a whopping 76.9% of the region’s trading volume being transfers of $1 million or more. This indicates a strong institutional interest and investment in the cryptocurrency market in North America.
However, it’s not just about the sheer volume of transactions. The nature of these transactions is also evolving. While North America continues to dominate the global DeFi (Decentralized Finance) transaction volume, there has been a noticeable decline in the share of decentralized protocols in the overall transaction volume over the past year.
This suggests a shift in the market dynamics and the strategies employed by traders and investors.
Further insights from The Block indicate that the crypto activity in North America saw a contraction following the issues with the FTX exchange and the subsequent criminal trial of its former CEO, Sam Bankman-Fried.
This event, however, was a smaller shock to the industry compared to the banking crisis in March, which saw the shutdown of Silicon Valley Bank by regulators. This was followed by actions against other crypto-friendly banks like Silvergate and Signature.
Interestingly, on-chain activity began to rise again in June. Data suggests that the pullback from institutional investors was the primary reason for the overall decline in activity. However, the activities of retail users and sub-institutional pro traders remained consistent.
Another area of interest is the use of stablecoins. The banking crisis seems to have impacted stablecoin usage in North America. Chainalysis data shows that stablecoin use fell from 70.3% to 48.8% of the region’s on-chain transaction volume over the past year.
This decline also saw the sector’s market capitalization reach its lowest point in over two years during the summer. Moreover, stablecoin activity appears to be shifting away from U.S.-licensed services. Currently, over half of all stablecoins traded are flowing to non-U.S. licensed exchanges.