The U.S. crypto market is losing its global dominance as regulatory action, including by the U.S. Securities and Exchange Commission, continues to hit the market.
According to the latest report from TokenInsight, a cryptocurrency research company, the market share of U.S.-compliant crypto exchanges will decline in the first quarter of 2023. Among them, the market share of Coinbase decreased by 1.31%, Kraken decreased by 0.60%, and Binance.US decreased by 0.37%.
The report said the top 15 exchanges had a combined volume of $10.8 trillion, a 40% increase from the fourth quarter of 2022. The cryptocurrency market has rebounded this year, with bitcoin surging more than 70%.
The decline in the market share of U.S.-compliant crypto exchanges could be attributed to increased regulatory pressure from the SEC, which has been scrutinizing the crypto industry for some time. The SEC has been investigating several cryptocurrency companies for potential securities violations, and several high-profile cases have resulted in hefty fines.
Despite the decline in market share of U.S. exchanges, the overall cryptocurrency market is still growing. The report suggests that this growth is due to the growing acceptance of cryptocurrencies by mainstream financial institutions and the wider public.
The report also noted that the rise of decentralized finance (DeFi) platforms could be a factor in the decline of centralized exchanges.
DeFi platforms allow users to lend, borrow, and trade cryptocurrencies without the need for a centralized exchange, which can be seen as a more secure and transparent alternative.