Between 2018 and 2022, the United States experienced a significant decline in its share of global crypto developers. In 2018, the U.S. was home to nearly 40% of all crypto developers worldwide, but by 2022, that figure had plummeted to less than 30%. It represents a 26% decrease in crypto developers based in the U.S. compared to the rest of the world.
Findings from the State of Crypto 2023 Report
The venture capital firm Andreessen Horowitz, commonly known as a16z, recently published a report entitled “State of Crypto 2023,” highlighting this downward trend. The report utilized data from Electric Capital and SimilarWeb to support its conclusions.
A key graph in the report illustrates the stark contrast between the U.S.’s nearly 40% share of global crypto developers in 2018 and the less than 30% share in 2022, marking a percentage decline of over one-quarter.
The report by a16z points to the lack of regulatory clarity as a potential factor contributing to the decline in the U.S. share of crypto developers.
The firm notes that despite ongoing debates, little progress has been made in providing clear regulations for the emerging web3 sector. Consequently, America’s competitive edge in the crypto space may be waning.
Hopes for a U.S. Comeback
Despite the challenges, a16z remains hopeful that the U.S. can recover some of its lost ground in the global crypto development landscape. Several bills have been introduced in Congress to establish regulatory clarity for crypto assets. These include the Responsible Financial Innovation Act, the Digital Commodities Consumer Protection Act, and the Digital Commodity Exchange Act.
The venture firm also cites high-profile crypto cases that may soon be resolved, providing grounds for optimism. These cases include the Securities and Exchange Commission’s enforcement action against Ripple, the Treasury Department’s civil actions related to Tornado Cash, and the bankruptcy proceedings involving FTX, Voyager, and Celsius.
Many within the U.S. crypto industry share the sentiment expressed by a16z regarding regulatory clarity. Coinbase CEO Brian Armstrong, for instance, argued in November that the collapse of FTX was partially due to U.S. regulations pushing crypto users to offshore platforms.
Similarly, in December, crypto lending platform Nexo announced its departure from the U.S., citing the government’s alleged unwillingness to provide a clear path for blockchain businesses.
Impact on Developers and Investors
The findings in the “State of Crypto 2023” report underscore the growing concern that the U.S. has become less attractive to developers and investors in the crypto space.
As regulatory uncertainty persists, the United States risks losing its status as a global leader in crypto development, potentially missing out on the economic benefits and innovations this rapidly evolving industry offers.
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