Why the United States has an advantage in the global infrastructure competition

The cryptocurrency industry is gradually shedding the constraints of the anti-establishment rhetoric of its early cypherpunks and entering a transformation marked by the booming emergence of institution-friendly infrastructure. Initially, innovation in the cryptocurrency space transcended national borders, but now it is actively adapting to and benefiting from geopolitical regulatory realities. Notably, projects in crypto-friendly jurisdictions with clear regulatory frameworks offer significant advantages, and the United States is a particularly prominent example in this regard. The current administration is actively promoting crypto-friendly policies, in stark contrast to the previous president's stance. We have previously explored how the United States has successfully established itself as a global cryptocurrency hub through proactive legislative initiatives (such as the GENIUS Act and the CLARITY Act), the development of a national decentralized physical infrastructure network (DePIN), and the advancement of layer-1 blockchain projects, ushering in a new chapter for the crypto space and laying a solid foundation. This article will continue this theme and, in light of the recent discussion surrounding U.S. cryptocurrency reserves, examine the critical role that access to capital plays in attracting AI and crypto projects. We will first explore the importance of regulatory clarity and how it fosters a safer operating environment for developers and instills confidence in institutional investors. Next, we will focus on the United States' unique position as a major global capital allocator, analyzing how this position makes it an ideal location for establishing and operating crypto projects. Finally, we will delve deeper into how these factors are driving crypto adoption by U.S. companies, ultimately concluding that the United States is poised to dominate the global infrastructure race. We have previously explored the impact of anti-crypto policy agendas on crypto projects' decisions to remain in or enter the United States. The more ambiguous and complex regulatory rules are, the more likely projects are to face unnecessary scrutiny and penalties. This issue was vividly demonstrated during Gary Gensler's tenure as Chairman of the U.S. Securities and Exchange Commission (SEC), when he pursued a "regulation to drive enforcement" policy. In stark contrast to Gensler's tenure, the Trump administration has actively used its authority to clarify regulatory uncertainties and vigorously advance a pro-cryptocurrency agenda. Specifically, the president is willing to rescind anti-crypto executive orders issued by the previous administration and has established a cryptocurrency task force under the leadership of the new, pro-cryptocurrency SEC Chairman, Paul Atkins. The task force's mission is to provide clear regulatory guidance for crypto assets under federal securities laws. When the government fully commits to and effectively implements pro-cryptocurrency regulations, it fosters an environment for domestic projects to plan long-term strategies, confident that they won't be targeted or penalized simply for their existence. This is a significant advantage over regions that remain mired in regulatory ambiguity or burdened by burdensome administrative oversight. Regulatory clarity in the United States has directly led to increased confidence among institutional investors. By codifying relevant policies into the legal system, the government has enabled institutional investors to confidently explore cryptocurrencies as an additional asset class. This has also created a virtuous cycle: attracting more capital to the sector, which in turn incentivizes companies to remain in the United States. The pace of cryptocurrency adoption by U.S. institutions offers a glimpse into its future trajectory. From Grayscale's launch of GBTC, the first Bitcoin investment vehicle, in 2013, to Michael Saylor and MicroStrategy becoming the first publicly traded company to hold Bitcoin, cryptocurrency adoption was low and fraught with potential legal and regulatory hurdles. Since then, supported by the new administration's clear regulatory framework, adoption has accelerated at an unprecedented pace, with numerous publicly traded companies adding Bitcoin ETFs to their balance sheets.

Press enter or click to view image in full size

Access to Capital

An often-overlooked advantage of US-based projects is their proximity to the world's largest venture capital ecosystem. From financial hubs like Silicon Valley, New York, and Chicago to emerging tech markets like Austin and Miami, now is an extremely attractive time for crypto startups seeking capital. The high concentration of US investors has led to funding round sizes that international projects struggle to match. The FTX crash in November 2022 had long-term consequences for investors, and coupled with regulatory uncertainty during the Biden administration, the crypto industry briefly slumped. However, with Donald Trump's election as president in the fourth quarter of 2024, the crypto industry began to see a return of venture capital. His pro-cryptocurrency agenda served as a catalyst for renewed investment, giving venture capitalists greater confidence in the long-term viability of the sector. November 2022 was a critical juncture. The collapse of FTX triggered industry turmoil, while ChatGPT 3.5 was released to the public. Since then, investment in artificial intelligence has surged, and AI investment now accounts for 37% of total venture capital. Venture capital in the United States has seen explosive growth, and the active adoption of innovative technologies by institutions has further accelerated this trend. Crypto and AI projects operating outside the United States not only face tougher regulatory hurdles than U.S. companies, but they are also unable to access a vast source of U.S. funding due to the passage of the executive order "Making Alternative Assets Available to 401(k) Investors."

Press enter or click to view image in full size

The result of this policy shift, and the inclusion of cryptocurrencies in US 401(k) investment plans, is the creation of a two-tiered market, with US projects able to access the capital needed to build enterprise-grade infrastructure, while international teams remain reliant on smaller retail adoption and limited ability to allocate capital.

ENTERPRISE ADOPTION

It’s not just funding or regulatory clarity that’s driving US cryptocurrency and AI investment back home. Projects rooted in the US and leveraging US infrastructure tend to attract more interest from US companies. This is because these projects are more familiar with local regulatory compliance requirements, have extensive operational experience, and face relatively low political risk. US-based AI and cryptocurrency projects have significant overlap in infrastructure and data center development, allowing US investors to develop more focused and targeted investment strategies based on familiar technology systems. Subsequently, US-based projects can capitalize on the network effects of corporate adoption. As more US companies adopt domestic cryptocurrency infrastructure, it becomes easier to attract additional investment and promote broader adoption, creating a self-reinforcing and virtuous cycle for US-based cryptocurrency projects. The US has a greater advantage in the global infrastructure competition. The emerging global cryptocurrency ecosystem appears to be inevitably heading towards differentiation. US-based projects will dominate the institutional and enterprise markets thanks to regulatory clarity, easier access to capital, and strong government support. These significant advantages intertwine to form a self-reinforcing virtuous cycle that, over time, will further solidify the United States' leading position in the global cryptocurrency market. International alternatives, in contrast, face increasing marginalization in high-value markets due to political risks, compliance gaps, and a lack of access to U.S. capital markets. While these international projects may effectively serve specific regional markets or the retail sector, the overall trend shows a growing concentration of institutional power in the United States. The large-scale migration of cryptocurrencies to U.S. infrastructure is likely to ultimately reshape international financial relations, creating new dependencies and power structures. This is essentially a struggle for control of the next generation of global financial infrastructure, and the United States is strategically positioned to reap significant benefits from this competition.