Are U.S. Regulators the Reason for Declining Cryptocurrency Trading Volumes?

This article briefly:

· Cryptocurrency trading volumes on exchanges hit their lowest point since October 2020.

· Some are blaming US regulatory action and this year's banking crisis.

· Major players are moving offshore to cryptocurrency hubs such as the UAE and Hong Kong.

Cryptocurrency trading volumes on exchanges hit their lowest point since October 2020, according to data from Kaiko. Experts point to the US banking crisis and an unfavorable regulatory environment as key factors.

Data from 18 centralized cryptocurrency exchanges tracked by Kaiko showed $5 billion in daily cryptocurrency trading volume, the lowest level since 2020. Many believe that the impetus behind the recent crackdown by the US Securities and Exchange Commission (SEC) and regulatory uncertainty is fading.

Cryptocurrency trading volumes drop significantly

Trading volume on a crypto exchange refers to the total number of digital assets bought and sold, and it is the most commonly used metric for assessing an exchange's size and popularity.

In both cases, the overall trend this year is down. Experts generally point to U.S. regulatory action as a key explanation. However, there is no clear consensus.

total transaction volume. Source: Kaiko

Danny Oyekan, founder and CEO of digital asset exchange Blockfinex, told reporters that this year's banking crisis may be at play.

“In the Middle East and Asia, trading volumes are actually doing quite well, but in the US and Canada they are lagging behind. It appears that US exchanges are struggling to get the banking services they need following heightened regulatory scrutiny and little progress in terms of regulatory clarity. "

**US regulators to blame? **

Oyekan believes that the root of the low interest in cryptocurrency trading is uncertainty in the United States, which is driving interest in other markets around the world.

“Uncertainty about regulation, the economy, and access to funds through banks. This uncertainty is driving many major players offshore, especially international cryptocurrency hubs like the UAE and Hong Kong, which may explain why volumes in Asia Performed so well."

Likewise, Ryan Li, co-founder of CyberConnect, believes that the unfriendly regulatory environment in the US is part of the problem.

Li told reporters, “This year, there are several factors at play, including low liquidity and market panic caused by regulatory actions, especially in the US. Trading volumes usually reflect the current macroeconomic environment, and May always proves that It's an interesting time for crypto."