The exchange reserve ratio for US vs offshore Bitcoin platforms has been declining, indicating that US-based exchanges have been experiencing a greater decrease in reserves compared to overseas platforms. This decline in the exchange reserve ratio is believed to be a result of the recent regulatory crackdown on crypto services in the US, which has shaken investor confidence in the market. US investors are assumed to be switching to decentralized exchange protocols or storing their crypto in self-custody wallets to safeguard their assets.
The SEC's enforcement actions, including the proposal to bar financial advisors from dealing in cryptocurrencies, have added to the downfall in user trust. The decline in trust and the regulatory crackdown have led to reports of FUD spreading throughout the crypto market.
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