Crypto Market Shifts Gears: US Takes Center Stage
As the world hurtles towards 2025, the crypto market is experiencing a significant paradigm shift. The re-election of Donald Trump as President has triggered a surge in demand for US-based digital-asset funds and derivatives contracts, solidifying the nation’s position as a hub for crypto activity.
A New Era of Trading
The Trump administration’s crypto-friendly stance has sparked a frenzy of trading, building upon the momentum generated by the successful launch of US Bitcoin exchange-traded funds (ETFs) in 2024. This perfect storm has catapulted the US to the forefront of digital-asset liquidity and benchmark pricing, surpassing Asia as the epicenter of crypto activity.
US Dominance in Trading
Data from Kaiko reveals that the share of daily Bitcoin trading against the dollar occurring in US hours has skyrocketed to approximately 53%, up from 40% in 2021. This shift is largely attributed to growing institutional participation, which has tilted the scales of “liquidity dominance” in favor of America, according to CF Benchmarks Head of Product Thomas Erdösi.
ETFs: A Game-Changer
US Bitcoin ETFs have witnessed cumulative daily trading volume exceeding $500 billion, accompanied by net inflows of around $36 billion since their inception in January. The iShares Bitcoin Trust, managed by BlackRock Inc., has emerged as one of the most successful fund launches in history. Under Trump’s leadership, the scope of US crypto ETFs is expected to expand beyond the current offerings, which are limited to Bitcoin and Ether.
Futures Market on the Rise
Open interest in Bitcoin and Ether futures hosted by the Chicago-based CME Group Inc. has reached all-time highs this year. CME has usurped offshore platform Binance Holdings Ltd. as the market leader, underscoring the growing importance of US-based futures contracts.
Market Depth Revival
The collapse of FTX exchange and sister hedge fund Alameda Research in 2022 had a devastating impact on liquidity. However, the introduction of US ETFs and Trump-fueled optimism have helped to revitalize market depth, bridging the so-called Alameda gap. According to Kaiko data, crypto market depth has returned to pre-FTX crisis levels, enabling the market to absorb larger orders without significant price fluctuations.
Leave a Reply