The Resurgence of the United States in the Crypto Market

Recent developments in the digital assets market indicate a resurgence of the United States' dominance in the crypto landscape. This resurgence is evidenced by the significant surge in spot Bitcoin ETF trading, the implementation of supportive regulatory changes, and a shift in the political climate towards favorable conditions for the industry.

Impact of Political Figures

Reports suggest a notable upturn with the revival of the dollar attributed to the increasing influence of crypto proponent Donald Trump in the ongoing presidential race. Despite previous regulatory scrutiny by the US Securities and Exchange Commission (SEC) targeting major players like Binance and Coinbase Global, a shift in its approach was observed in 2023. By the end of May 2024, the SEC surprisingly started approving spot Ether exchange-traded funds (ETFs), hinting at a more accommodating stance towards cryptocurrencies.

Political Landscape

Donald Trump, known for his advocacy of cryptocurrencies, holds a slight lead over President Joe Biden in public opinion polls. Concurrently, legislative endeavors are gaining momentum within the sphere of cryptocurrency regulation. Noteworthy is the prediction by Bloomberg Intelligence analysts that the Financial Innovation and Technology for the 21st Century Act (FIT21) stands a good chance of being enacted into law by 2025, introducing a fresh regulatory framework for digital assets.

Expert Predictions

Mike Novogratz, the CEO of Galaxy Digital, foresees that the favorable political climate in the US could propel Bitcoin's price beyond $100,000 by the end of 2024. Bitcoin has seen a remarkable surge of nearly 70% year-to-date (YTD), currently trading at around $71,104 with a 24-hour trading volume soaring by 36% to $38.16 billion. The total market capitalization of digital assets has reached $2.63 trillion, with a trading volume of $93.7 billion.

Impactful Launches

The shift towards US dominance commenced significantly on January 11 with the debut of spot Bitcoin ETFs by BlackRock Inc. and Fidelity Investments, amassing a remarkable $61 billion in assets. This launch has been celebrated as one of the most successful in the history of fund category launches, reshaping trading trends. Trading volumes of Bitcoin are increasingly focusing on US market hours, with the percentage of cumulative Bitcoin trading volume rising to 7.2% before US markets close, compared to 4.9% during the 2021 crypto bull run, driven by the ETFs' valuation principles.

In contrast, the introduction of spot-crypto ETFs tracking Bitcoin and Ether in Hong Kong has not attracted the same level of inflows as their US counterparts.