In response to the increasing US regulatory crackdown, American crypto firms are looking for opportunities overseas, according to a research report by JPMorgan released on Thursday. Analysts, led by Nikolaos Panigirtzoglou, wrote that Binance’s US-based arm has ended its deal with Voyager, while Coinbase launched Coinbase International, an offshore crypto derivatives exchange.
Lack of Clarity on Key Issues
The analysts noted that the regulatory clampdown has not only increased pressure on crypto firms but also left important issues unresolved, such as Ethereum’s (ETH) status as a security. This uncertainty could ultimately impact the demand and liquidity of the cryptocurrency.
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Institutional Investors Deterred
JPMorgan’s report also stated that the crackdown has “deterred institutional investors from engaging with crypto.” Instead of investing in Bitcoin (BTC) as a hedge against potential catastrophic scenarios following the collapse of Silicon Valley Bank, investors have been opting for gold. The bank highlighted that Bitcoin’s rally this year, which has seen a 76% increase year-to-date, appears to be driven by retail buying rather than institutional investors.
Bitcoin Ordinals Driving Outperformance
Another factor contributing to Bitcoin’s outperformance is the new protocol, Bitcoin Ordinals. This protocol enables non-fungible tokens (NFTs) to be stored on the Bitcoin blockchain, further boosting the cryptocurrency’s appeal.
In another development, Block, formerly known as Square, announced the completion of its 5nm Bitcoin mining chip prototype design, which aims to decentralize the supply of Bitcoin mining rigs. This move will make Bitcoin mining technology more accessible by selling standalone ASICs and other hardware components to a wider range of participants.
