Let's get to the big story.
Breakdown on this Friday morning.
We are looking at Bitcoin holding above 70,000 now.
The crypto market is undergoing a massive structural as well as geographic shift and fueled by the 2024 spot ETF approvals and a more pro crypto SEC under Paul Atkins.
US exchanges have nearly doubled their spot market share from 8% to 15%.
The past year, but at the same time, the real story isn't just about trading volume.
It is also about liquidity.
Bitcoin market that's on US platforms like Coinbase Kraken and newly public bullish is now significantly robust compared to offshore giants.
Meanwhile, the battle lines are expanding into derivatives following late 2025 regulatory approvals.
Meanwhile, decentralized.
Exchanges are blurring the lines between crypto equities as well as commodities.
Joining me live here at the New York Stock Exchange is Adam Morgan McCarthy, Product Specialist, Analytics & Indices at Kaiko.
Well, good morning.
Thank you so much for joining me.
Thanks for having me.
It's great to be here.
Well, we've seen a lot of activity when it comes to all asset classes in 2026, but when we take a look at what's happening.
With crypto majors in particular Bitcoin, what are we seeing in terms of volume in the US compared to overseas markets?
What we saw, I think, was 2 years ago you mentioned the structural shift from offshore unregulated exchanges or underregulated exchanges onto the US where they've got constituent exchanges for Bitcoin ETFs and then spotty Ethereum ETFs.
Now you've got Solana and XRP.
So there's a lot more volume onshore in the US with that there was a lot more steady liquidity throughout the trading day in the US, particularly between 3 and 4 p.m.
Eastern, which was really positive for ETFs and supported the growth over the last two years.
Sadly we've seen that kind of bid disappear in the last six months, particularly since October when there was a big shock in the market, which I think reminded people that crypto still is a scent.
Asset there are some structural issues there that can cause 20-30% drops, but what we've seen as well, I think we were at Exchange ETF in Vegas earlier this week talking to advisors and asset managers from across the states and the globe, even a lot of them have allocated enough to Bitcoin at this point and they've got 2-3% as their recommendation, maybe even less, and they're not seeing room for more allocation right now and that's.
Pull back that liquidity.
So while it is onshore in the US, that comes with kind of regime shifts and cyclicality that's going to also impact things like what we're seeing lately when the price falls 50,000 because that bids pulled back.
In addition to volume, of course there is liquidity as you just mentioned, and when we're looking at crypto majors like Bitcoin or there is also a lot going on.
So what would you say in terms of liquidity?
What is actually happening when it comes to the what's under the surface?
Yes, I think you know headline volumes are down.
But you're seeing good strong market depth on certain exchanges like you touched on there at the start of the US majors, which is positive.
I think.
In previous cycles we've not had that and it's led to a bigger sell off.
I think we're at about 700 this morning.
It could be less by the time I'm finished talking, but that's relatively strong versus other kind of bear markets we've experienced.
Three years ago I'd expect us to be probably around the 40 to 50K range already, so I think that market debt and that liquidity on US venues, while it has pulled back a bit, it is helping to keep it a little bit more steady.
We've seen the volatility come down over the past year thanks to that, and it does support the kind of market going forward and helping it institutionalize.
We're not quite there yet, but it's an important building block.
Yeah, and another part of this is perps.
So tell us what's happening with PRPs and what do you expect to see, especially given the fact that we have seen such growth in trading activity recently?
Yes, so I've focused a lot on the majors there, you know, Bitcoin, Solana.
There's not really been a bit outside of that in terms of all coins or so-called all coin season where you get kind of small caps rallying.
What's filled the gap there and kind of taken all the oxygen out of the room is equity purposes and commodity purposes.
So we've seen a lot of people trade these non-traditional futures with no expiration on decentralized exchanges on hyperliquid.
They've suddenly launched with Trade XYZ Kinetics markets by Kinetic and Dream Cash.
There's been huge volume in all of these venues.
The other day we just saw the S&P 500 license.
It's an iconic index to trade X, Y, Z.
There's oil trading on the weekends when the Iran war started off.
The only place to get an accurate price for this was on chain, so that's been huge, and I think it's largely been driven by the fact that there's just more activity in these kind of traditional assets right now and it's more exciting for people.
So crypto rather than on boarding the masses onto crypto, we've on boarded the crypto masses onto equities.
It's kind of interesting. and Adam, you mentioned the exchanges and we're here on the trading floor of the New York Stock Exchange.
We've heard about tokenization announcements from the New York Stock Exchange as well as Nasdaq.
So as we continue to head further into 2026, we can expect a little bit more volatility.
There's a lot of uncertainty regarding the conflict in the Middle East.
So what does this tell you when it comes to the landscape?
I think it's.
The volatility and the kind of excitement all in the traditional market right now, so I think crypto is going to take a back seat for the next 6 months, maybe longer.
I'm excited.
I'm not expecting to see too much there.
I think beyond some new ETF products that we might get, it could be interesting for assets in the top 10 or so, but I think the excitement is definitely.
Right now and it's where people are watching and commodities and oil and gold and silver, especially earlier in February.
That's where I'm going to keep my focus, I think, for the next 6 months or so.
Yeah, and I'm sure you'll continue to monitor what's happening in both DI as well as Trad, but can you tell us what sectors are actually outperforming?
Yeah, I think hyperliquid like the Dei kind of infrastructure plays, they're outperforming.
You're seeing some really interesting performance there for hyperliquids underlying token hype.
Other than that it's quite limited.
You're seeing some kind of brief rallies and other assets.
I think you saw Canton Coin did really well earlier this month and Chain Links Link is doing well from some of its moves into the tokenization space, but it's really been kind of top heavy on the hyperliquid stuff which is.
A lot of the attention, other than that it's traditional equities, you know, and people are liking trading like the vanilla equity indices.
It's not even exotic like small asset classes.
It's just the big guys that's what people are trading, so I think that's where the attention is and I think it's where it's going to stay most likely.
Yes, and finally, before I let you go, I do want to get your take on the regulatory landscape here in the US.
So what are your expectations and what do you expect, not just stateside but also overseas?
Yeah, I think it's been sort of underplayed because the regulatory shift has been huge.
I've been following crypto for 8 or 9 years now.
This is like the most friendly we've ever had, and it's kind of gone along in the background unnoticed.
Because the price action has been poor, but I think it's setting it up for the future where you're going to have a solid base there in terms of, you know, you've got token listing standards from the SEC.
The SEC and the CFTC are working together.
One of the things as a European I find funny that there are these two competing regulatory bodies, but now they're finally sitting in a room together talking about how to approach digital assets, which is huge and it can't be underestimated.
So I think that's really important.
More broadly, you know, we've seen MA in Europe has come in.
We sort of regulate first, innovate later in Europe, so I'll see how that develops, but I think the regulatory landscape has been great and we'll have to see what happens with the Clarity Act.
I know there's been some tension between the traditional banks and the crypto.
You know natives in terms of Brian Armstrong and Jamie Dimon are putting heads on that apparently.
We'll see what happens there, if that gets done in this session.
If not, then maybe it's going to get kicked down the road.
That'll be one headwind I see before the midterms.
It's probably a tight timeline to get that done, so it'll be something I'll be watching.
OK, Adam, well, great having you on the show today.
Thank you so much for joining me here today at the New York Stock Exchange.
Thank you.
