The cryptocurrency market has experienced notable developments, with Bitcoin still leading the pack but facing new challenges. According to the most recent data on cryptocurrencies, the expansion of everything associated with the blockchain network has been slowing down.
The US Bitcoin market, in particular, is facing a drastically different scenario as investors eagerly anticipate the upcoming Bitcoin ETF, only to have their Bitcoin ironically kept by Goldman Sachs, JPMorgan, and Sen. Elizabeth Warren continues to wage war on self-custody, which is preparing the US Bitcoin market for the impending arrival of a whole other paradigm.
Top Cryptocurrencies: Dominance and Market Share
Bitcoin represents 50.2% of the entire cryptocurrency market value, while the remaining 49.8% is spread among the next 19 largest digital currencies. Ethereum holds the second largest share (17.7%), followed by TetherUSD (7.6%) and BNB (3%). Cryptocurrencies outside the top ten account for only 13.6% of the market capitalization.
Over 90% of stablecoin activity involves US dollar-pegged stablecoins due to their widespread use in fast, low-cost transactions. Given the potential for illicit activities with these coins, regulators are focusing on their regulation.
How the US Threatening Crypto’s Core Values
It is possible that in the future, large organizations such as Goldman Sachs and JP Morgan may hold American citizens' bitcoins instead of common people, and that this could even be mandated by law. The approval of the Bitcoin ETF has been well welcomed by the community, who were hoping for favorable price movements. However, the technology that was meant to reduce counterparty risk is compromised by the instrument. Thus, Bitcoin's innovativeness is basically removed.
Given that the SEC wants the ETFs to be issued on a cash-in/cash-out basis, buyers of the Bitcoin ETFs will get a paper certificate rather than bitcoins. Thus, in return for convenience and the slightly distorted sense of security one receives when an asset is acquired by a large, regulated organization, Bitcoin ETFs remove bitcoins from the hands of holders.
Investors will also be required to go via the centralized organizations that Bitcoin was intended to avoid due to Warren's plan. No more cold storage, no more self-custody. The Senator's fight against self-custody would make it more difficult for software developers to develop safe, "non-custodial" cryptocurrency wallets where users may manage their own money instead of putting it in the hands of third-party custodians and sometimes erratic cryptocurrency exchanges.
This bill, called the Digital Assets Anti-Money Laundering Act, would harm consumers and the industry since it forbids digital asset mixer use and mandates the implementation of anti-money laundering (AML) procedures by miners, validators, and self-hosted wallets. The fate of Bitcoin in the US is uncertain, which is a sad but real fact.
Adoption in the US: Growing Trends and Statistics
17% of Americans, translating to about 53 million individuals, engage in the usage of cryptocurrencies. North America, home to a significant portion of this adoption, is the world's largest crypto market, with a valuation of $1.2 trillion. Despite decreasing transaction volume and adoption, North America remains the leading crypto market worldwide.
In 2023, North American on-chain activity accounted for about 24.4% of global on-chain activity. However, significant declines were observed due to high-profile events like the FTX exchange fall and crypto bank crisis.
The US regulatory landscape shapes the future of the crypto industry as it navigates challenges like Warren's proposed Digital Assets Anti-Money Laundering Act. This bill, if passed, could restrict self-custody and impact companies creating non-custodial wallets. The pivotal role of the US in crypto innovation could change as Europe's clear regulations and Asia's dominance come into play.