US Crypto Ecosystem, Sleeping Coins and Bitcoin Selling Tactics

Over the past five days, the cryptocurrency market has managed to win back the recent drawdown. Almost all major digital assets closed the reporting period with a slight plus, according to a correspondent for the Kapital.kz business information center.

Market participants have been keeping a close eye on the world’s first economy for signals about future digital asset policy. The United States of America could well lose its dominant position in the field of cryptocurrencies, giving leadership to the United Arab Emirates, South Korea, Australia and Switzerland, Yassin Elmanjra, a specialist at ARK Invest, warned. In his report, the analyst emphasized that the recent departure of market makers Jane Street and Jump Trading from the United States was the first signal of a negative response to insufficiently thought-out regulation in the country. “Once rich in reliable and trusted participants, the crypto ecosystem in the US is now facing a vacuum that is likely to cool the interest of other large investors,” explained Yassin Elmanjra. According to the expert, the unclear regulatory environment has a negative impact on existing companies and repels new participants. In 2023, the SEC pointed to violations in the activities of Bittrex, Coinbase, Kraken, Gemini and Genesis. The CFTC has filed a lawsuit against Binance and its CEO Changpeng Zhao. Crypto-liquidity in the US has since “substantially declined,” says ARK Invest. Referring to Coin Metrics data, he noted that over the past two months, the volume of bitcoin trading in the country has decreased by 75% – from $20 million per day in March to $4 million per day in May.

Yassin Elmanjra also noticed that the cost of the first cryptocurrency on Binance.US was $600 higher than on other exchanges. In his opinion, this was evidence of incorrect pricing in the United States. To remedy the situation, they started their game at Coinbase. The cryptocurrency exchange launched a television ad campaign in Washington, D.C., highlighting the importance of digital assets as a technological innovation. The company posted an extended version of the video on YouTube. In it, Coinbase CEO Brian Armstrong stated that those who view cryptocurrencies as purely speculative are “not seeing the forest for the trees.” According to him, the industry is at an early stage, which can be compared with the early years of the spread of the Internet. “At its core, cryptocurrency is not a financial product, but a technology that can upgrade all kinds of financial products. It is necessary to speed up the settlement time, reduce the cost of transferring money to relatives abroad, ”Brian Armstrong emphasized. He focused on the fact that this innovation could not but appear and will not disappear from our lives. The head of Coinbase believes that the US may face a national security problem due to the technological backlog caused by the regulatory policy towards cryptocurrencies. Note that the Coinbase campaign is aimed both at participants in the legislative process in the US capital, and at the fact that ordinary Americans begin to put pressure on their representatives in power.

The narrow range of quotes of the first cryptocurrency last week coincided with an extremely low volume of value transferred in the network. Most of the coins were “asleep” in anticipation of higher prices, analysts at Glassnode said. Experts noted an 85.5% decrease in the amount of value transferred to the online network from the peak at the beginning of 2021 ($13.1 billion) to the current $1.9 billion. A similar trend was observed in transfers to exchange wallets – from $4.2 billion to $343.4 million (by 91.8%). The total amount of realized profits and losses fell to the lowest levels in three years, which was evidence of “the unwillingness of investors to spend their bitcoins.” “We found that both nominal and realized network capacity remain cyclically low. For many market participants, the “cost” of purchased bitcoins is quite close to the current price, which indicates minimal incentive to spend them. This stimulus may increase with an increase in volatility in any direction, ”the experts pointed out. Analysts estimate that the realized price, excluding coins more than seven years old ($25,200), can serve as psychological support. Weekly quotes were slightly above the indicated level. This confirmed the assumption that active market participants simply cannot make a significant profit (or loss), analysts added.

According to the results of the past seven-day reporting period, the total capitalization of the cryptocurrency market showed a barely noticeable increase. As of Wednesday evening, May 24, 2023, it amounted to $1.135 trillion, which is 1.07% higher than the values ​​recorded at the end of the last reporting period.

1. Bitcoin (BTC). As of Wednesday evening, May 24, 2023, the cost of “digital gold” was $27,155. Over the past seven days, BTC has added 1.04% in price. The market capitalization of bitcoin increased by $6 billion and amounted to $526 billion. The share of the “first cryptocurrency” in the total market capitalization increased by 0.02 percentage points and at the end of the reporting period amounted to 46.4%.

2. Ethereum (ETH). On Wednesday evening, May 24, 2023, the cost of “ether” was $1847. The price of “digital oil” increased by 2.33% compared to the value at the end of last week. The share of Ethereum (ETH) in the total capitalization of the cryptocurrency market increased by 0.24 percentage points and amounted to 19.58%.

3. Binance Coin (BNB). As of Wednesday evening, May 24, 2023, BNB was valued at $312. According to the results of the past seven-day period, the price of the cryptocurrency added 0.97%. The share of Binance Coin (BNB) in the total cryptocurrency market capitalization lost 0.01 percentage points and amounted to 4.29%.

4. Ripple (XRP). As of Wednesday evening, May 24, 2023, Ripple (XRP) was worth $0.46. “Banking cryptocurrency” increased in price by 3.6% compared to the values ​​at the end of last week. The share of “banking cryptocurrency” in the total capitalization of the cryptocurrency market increased by 0.05 percentage points and amounted to 2.1%.

5. Cardano (ADA). As of Wednesday evening, May 24, 2023, Cardano (ADA) was worth $0.369. The value of this digital asset grew by a modest 0.54% over the past reporting period. The share of ADA in the total capitalization of the cryptocurrency market increased by 0.01 percentage points and amounted to 1.15%.