The State of the Blockchain Ecosystem in the United States
This is the first article in a series where we will explore the current state of the blockchain ecosystem in specific countries, with each article featuring a different country.
The Blockchain Ecosystem In The U.S. By The Numbers
The blockchain ecosystem is alive and well in the United States. According to a survey conducted by the University of Chicago in 2021, 13% of the American population bought or traded cryptocurrency in the past 12 months. That’s more than 1 in 10 people. 24% of Americans invested in the stock market over the same period. So, although cryptocurrency use has increased over time in the U.S., there are still considerably less people investing in cryptocurrency than in stocks.
Considering the size of the U.S. population and its status as the country with the third-highest population in the world, the popularity of cryptocurrency trading and the overall blockchain ecosystem is not as high when compared to other countries. For example, back in 2018, although South Korea represented less than 1% of the world’s population, estimates indicated that it was responsible for 30% of all cryptocurrency trading in the world.
Still, to many, the number of people trading cryptocurrencies in the U.S., at more than 1 in 10, represents a significant milestone on the path to mass adoption of cryptocurrencies and blockchain technology.
Furthermore, recent research from The Ascent found that more than 20% (50 million+) Americans who have never owned cryptocurrency are likely to buy crypto in the next year, signaling the rapid adoption rate of the blockchain ecosystem in the U.S. is expected to not only continue, but accelerate.
Recent News Concerning The Blockchain Ecosystem In The U.S.
In 2021, a spotlight has been placed on the blockchain and crypto space, particularly in the United States, for a number of reasons. In August, concerns over the wording of an amendment in the U.S. infrastructure bill arose when it was determined that it would make all crypto service providers register as broker-dealer entities and report filings to the Internal Revenue Service (IRS). This event saw the first appearance of a crypto lobby, as influential members of the crypto community in the U.S. fought to have the wording in the bill changed.
This issue appeared at a time of increased concern over the crypto regulatory landscape in the country, and shortly after a new presidential administration was sworn into office. Crypto regulations in the U.S. have generally been in a state of uncertainty for some time as members of the crypto community have been waiting to see how the government, and in particular the new Chair of the Securities and Exchange Commission (SEC), would respond to the growing influence of cryptocurrencies.
A Statement About Crypto Tokens
The new Chairman of the SEC, Gary Gensler, stated in May 2021, stated the following:
“To the extent that something is a security, the SEC has a lot of authority. And a lot of crypto tokens — I won’t call them cryptocurrencies for this moment — are indeed securities.”
As Mr. Gensler has classified many crypto tokens as being securities and thus under the jurisdiction of the SEC, and based on other statements he has made, additional regulations regarding cryptocurrencies are expected during his tenure, although the full extent of these regulations had not been fully revealed at the time of writing this article.
Bitcoin ETFs
Then, in Mid-October 2021, the SEC took significant steps toward allowing Bitcoin ETFs in the U.S. The SEC allowed a Bitcoin ETF to start trading, signaling a certain degree of recognition of the cryptocurrency and blockchain ecosystem.
Each of the events listed above had at least a temporary impact on the cryptocurrency market as a whole. However, a seemingly hard stance on cryptocurrencies followed by allowing a Bitcoin ETF to trade has made the regulatory landscape appear uncertain for cryptocurrencies, as these actions have kept some members of the crypto community guessing the SEC’s next move.
Crypto Exchanges in The United States
A number of cryptocurrency exchanges have been granted legal authority to operate in the United States. Providing easy access for crypto enthusiasts to trade cryptocurrencies as well as the blockchain platforms to enable crypto trading is a significant and important key to the overall success of the blockchain ecosystem in any country.
Coinbase, the largest cryptocurrency exchange in the U.S., held an initial public offering in April 2021, which represented a “watershed” moment for the crypto industry in the country after years of skepticism from Wall Street, signalling potential acceptance of the blockchain ecosystem from more traditional financial institutions.
FTX has done a lot for the marketing of the blockchain ecosystem recently by buying the naming rights to a number of popular sports stadiums, including the stadium where the Miami Heat NBA basketball team plays and the football field at the University of California at Berkeley. These key naming purchases have raised the profile of the blockchain ecosystem in the United States, considering the popularity of college and professional sports teams in the country.
Cryptocurrencies and Blockchain In The U.S.
As the blockchain ecosystem has grown in the U.S., the popularity of the space has also grown, with more Americans than ever before considering themselves to be crypto traders and declaring that they own crypto tokens. With the SEC under the Biden Administration seeming ready to regulate cryptocurrency, the crypto space in the U.S. has finally gained legitimacy in the eyes of the financial system and its regulators. If there was any doubt that the federal government was ready to recognize the importance of cryptocurrency and blockchain technology, the decisions regarding the Bitcoin ETF have put an end to it.
With crypto projects and crypto tokens receiving investment from prominent institutions, we can expect the blockchain ecosystem in the U.S. to continue to gain additional support from those who are already knowledgeable about crypto and blockchain, as well as the general public.
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