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The European Securities and Markets Authority (ESMA) warned that crypto markets are extremely targeting April 10.
ESMA mentioned focus is a priority as a result of a single asset or alternate failure may broadly influence the crypto ecosystem.
In line with the company’s findings, market capitalizations and buying and selling volumes are “considerably concentrated” in a small variety of property throughout the crypto market.
Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) accounted for 74% of the crypto market cap in December 2023 and made up greater than half of 2023’s annual buying and selling quantity.
Exchanges additionally demonstrated concentrated buying and selling volumes, as simply 10 platforms dealt with 90% of buying and selling. Binance alone accounted for about half of all buying and selling quantity, although its dominance fell to 40% by December 2023 and has been on a gradual decline general since December 2022.
ESMA warned that particular person cryptocurrencies are extremely interconnected and present robust worth correlations with one another. Moreover, it described a constructive correlation between crypto and equities, demonstrating danger plus a scarcity of a secure relationship with gold.
The company mentioned it doesn’t take into account crypto an efficient “secure haven” in gentle of its evaluation.
The EU perspective
Particular findings are notably related to the EU’s regulatory actions. Of the 20% to 30% of crypto transactions involving fiat, 80% concerned the US greenback or South Korean received. The euro performed a “minor position,” accounting for about 10% of fiat transactions.
The euro’s involvement in fiat-crypto transactions didn’t enhance even after the EU adopted the Markets in Crypto-Belongings (MiCA) regulation in June 2023. Nevertheless, ESMA mentioned that MiCA guidelines may “represent a possible progress driver” when applied this yr.
Alternate location is one other situation. Though 55% of transactions occurred on exchanges with an EU Digital Asset Service Supplier (VASP) license, most of the identical transactions occurred exterior of the EU. About half of crypto buying and selling volumes happen on exchanges based mostly in tax havens, whereas Europe-based exchanges buying and selling quantity is nearly non-existent.
ESMA mentioned that MiCA will deal with location-related issues by disclosure necessities, bettering transparency at the same time as crypto exchanges increase to new jurisdictions.
The company mentioned that its analysis broadly “helps the implementation” of MiCA.
The submit EU watchdog warns of excessive focus in crypto markets, notes minimal euro utilization appeared first on CryptoSlate.
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