An analyst from ARK Invest states that the US crypto sector is currently dealing with a “void” of well-established and credible companies.
Yassine Elmandjra, an analyst at ARK Invest, warns that the United States runs the risk of losing its position as a leader in the battle for cryptocurrencies to nations like the United Arab Emirates, Korea, Australia, and Switzerland.
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Elmandjra cited the recent withdrawal of trading companies Jane Street and Jump Trading related to cryptocurrencies as the first indications of a broader reaction to the country’s unstable regulatory environment in a note to ARK Invest clients on May 22.
“The U.S. cryptocurrency ecosystem, which was formerly populated by well-known and reliable institutions, now faces a void that is likely to stop interest among other institutional investors.”
“Regulatory uncertainty in the United States seems to be deterring both existing firms and new entrants in the cryptocurrency space,” he continued.
With more than $14 billion in assets under management, ARK Invest is a multinational asset management company led by CEO Cathie Wood.
Elmandjra also stated that cryptocurrency liquidity in the United States has “diminished considerably,” stating that the amount of Bitcoin traded there had dropped by 75% in the previous two months. According to him, using data from Coin Metrics, it has decreased from $20 billion each day in March to roughly $4 billion during the past week.
Meanwhile, some U.S.-based cryptocurrency businesses are already starting to look elsewhere as a result of the U.S.’s increasing hostility toward businesses that deal with digital assets and those that do so.
Considering the UAE as a “strategic hub” for its business, Coinbase, which is suing the U.S. Securities and Exchange Commission for its unclear stance on cryptocurrency regulation, stated.
Read More: UAE Securities Regulator is Now Accepting License Application From Crypto Firms
The United Arab Emirates is being eyed by a number of prominent corporations as a possible location for their headquarters, including Coinbase. According to Saqr Ereiqat, co-founder of venture-building company Crypto Oasis, the UAE is an “ideal” site for both new and established crypto enterprises due to its more positive governmental approach toward digital assets.