US Regains Primacy in Crypto Market on Trump Agenda, ETF Demand

(Bloomberg) -- The crypto market’s center of gravity is back in the US as 2025 approaches, courtesy of Donald Trump’s reelection to the presidency and widening demand for the nation’s digital-asset funds and derivatives contracts.

Trump’s vow to make America the linchpin of the crypto sector ignited a frenzy of trading, adding to a spurt in activity triggered by the surprisingly successful rollout of US Bitcoin exchange-traded funds from the start of 2024.

As a result, the US is increasingly key for digital-asset liquidity and benchmark pricing, whereas for part of last year Asia appeared to be the big beneficiary of a Biden administration crypto crackdown that Trump is now undoing.

The charts below capture changes in crypto market structure during an historic 12 months when US demand helped take Bitcoin past $100,000 for the first time.

Trading Shift

The share of daily Bitcoin trading against the dollar occurring in US hours has climbed to about 53% from 40% in 2021, data from Kaiko show. Growing institutional participation has shifted “liquidity dominance” toward America, CF Benchmarks Head of Product Thomas Erdösi said.

ETF Volumes

US Bitcoin ETFs have logged cumulative daily trading volume of more than $500 billion and net inflows of about $36 billion since going live in January. BlackRock Inc.’s iShares Bitcoin Trust is one of the most successful fund launches ever. Under Trump, the deck of US crypto ETFs is expected to expand beyond the current offerings, which are limited to Bitcoin and Ether.

Futures Demand

Open interest — or outstanding contracts — for Bitcoin and Ether futures hosted by Chicago-based CME Group Inc. reached all-time highs this year. CME now ranks top for Bitcoin futures open interest, whereas previously offshore platform Binance Holdings Ltd. was the market leader.

Market Depth

The collapse of the FTX exchange and sister hedge fund Alameda Research in 2022 badly hurt liquidity. The US ETFs and Trump-fueled optimism have helped to turn things around. Crypto market depth — the ability to shoulder relatively large orders without unduly impacting prices — is back at levels seen before the FTX crisis, closing much of the so-called Alameda gap, Kaiko data show.