Chainalysis report: institutional investors drive North America’s $1.3 trillion crypto market

North America continues to dominate the global cryptocurrency market, receiving an estimated $1.3 trillion in on-chain value between July 2023 and June 2024.

This figure represents 22.5% of worldwide crypto activity, driven primarily by institutional investors.

Source: Chainanalysis

The region remains a leader, but challenges such as the evolving regulatory landscape and the lack of retail participation could impact future growth. In this report, we’ll explore the key factors behind North America’s crypto market dominance and the challenges it faces.

Institutional activity remains the driving force

Institutional trading has played a crucial role in North America’s leading position within the cryptocurrency market.

According to the latest report from blockchain analysis firm Chainalysis, nearly 70% of the region’s crypto activity involved transfers exceeding $1 million.

The approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) in early 2024 has been a significant catalyst for this surge in institutional interest.

In October, spot Bitcoin ETFs saw their largest one-day inflow in four months, with more than $1 billion added across the 11 ETF offerings.

This influx has contributed to North America’s continued leadership in the global crypto market.

US and Canada at the forefront of global activity

Both the US and Canada have maintained a strong presence in the global cryptocurrency space.

The US remains the largest crypto market, supported by regulatory clarity following key legal decisions, including the Ripple and Grayscale cases.

These rulings paved the way for major asset managers like BlackRock and Fidelity to launch spot Bitcoin and Ethereum ETFs.

Meanwhile, the Canadian market remains a significant player, receiving $119 billion in crypto value over the last year.

The country’s institutional infrastructure, coupled with its well-regulated financial system, has enabled Canada to support the overall dominance of North America in the global crypto ecosystem.

Source: Chainanalysis

The impact of regulatory clarity on crypto markets

The importance of regulatory clarity cannot be overstated when it comes to institutional involvement.

David Duong, Head of Institutional Research at Coinbase, noted that trading volumes on the platform doubled in the first half of 2024 due to the regulatory environment gaining transparency.

Duong suggested that concerns about the US credit “maturity wall” in early 2025 may push investors towards crypto assets as a way to diversify their portfolios and hedge risks.

At the same time, North America faces increasing competition from other regions with well-defined regulatory frameworks.

Europe, Asia, and the Middle East have begun implementing comprehensive crypto regulations, attracting businesses seeking to operate within clear legal boundaries.

For instance, the European Union’s Markets in Crypto-Assets Regulation (MiCA) has set a benchmark for crypto regulation globally.

The United Arab Emirates recently approved the issuance of an AED-backed stablecoin, making it a key player in the region’s growing crypto market.

Retail adoption still lagging behind

Despite the rapid growth in institutional activity, retail adoption has not yet returned to its previous bull market levels in North America.

Retail investors, including small and professional-sized transfers, have shown less enthusiasm for the crypto resurgence compared to institutions.

This trend indicates that North America’s dominance could be at risk if retail engagement does not pick up in the coming years.

Regulatory developments will shape North America’s future in crypto

North America’s continued leadership in the cryptocurrency market hinges on regulatory developments.

While other regions have made significant strides in setting up clear legal frameworks, the US has lagged behind in reaching consensus, particularly concerning stablecoin supervision.

The lack of clear regulation surrounding stablecoins could lead to a reduction in liquidity and trading activity in the region.

Source: Chainanalysis

Industry experts agree that for North America to retain its dominant position, it will need to implement “sensible regulation with clear rules.”

If the US and Canada fail to keep up with regulatory advancements in other regions, North America’s crypto market could see a shift, with more businesses and investors looking to regions offering better clarity.