Data from Glassnode reveals the Bitcoin supply has been observing a shift from wallets based in America to those in Asia recently.
Bitcoin Supplies Held By Asian And US Investors Have Gone Opposite Ways Recently
According to data from the on-chain analytics firm Glassnode, an interesting dichotomy has formed between the different regional supplies of the cryptocurrency recently.
Glassnode has divided the Bitcoin addresses into different regions based on the hours they have been making transactions in. “Geolocation of Bitcoin supply is performed probabilistically at the entity level,” notes Glassnode. An “entity” here refers to one or more wallets that are under the control of a single investor (or an investor group).
“The timestamps of all transactions created by an entity are correlated with the working hours of different geographical regions to determine the probabilities for each entity being located in the US, Europe, or Asia,” explains the analytics firm.
The three main regions are the US (13:00 to 01:00 UTC), Europe (07:00 to 19:00 UTC), and Asia (00:00 to 12:00 UTC). In the context of the current discussion, however, only the supplies based in the US and Asia are relevant.
Here is a chart that shows the trend in the year-over-year supply change in these two regional Bitcoin supplies over the last few years:
Looks like the values of the two metrics have been going exactly the opposite directions in recent months | Source: Glassnode on Twitter
As displayed in the above graph, the Bitcoin supply held by the US investors was growing faster and faster in the leadup to and during the bull run in the first half of 2021 as the year-over-year change was constantly going up.
The change slowed down in the second half of the year, but still remained positive, suggesting that the supply was still growing, albeit at a slower pace. In 2022, however, the supply started decreasing, as the bear market took over and the LUNA and 3AC crashes took place.
The year-over-year change of the US-based BTC supply has continued to grow more negative since then and today stands at a value of -7.5%, suggesting that the supply has shrunken by 7.5% since May 2022.
The Asian Bitcoin supply, however, has displayed a very contrasting behavior, as it started going up just as the American investors started shedding their holdings.
Interestingly, the pace at which the supply held by the Asian traders has transformed is almost exactly the same as what the balances of the US-based wallets saw (although, of course, the change has been in the opposite direction).
Currently, the year-over-year change in the Asian supply stands at +6.9%. The fact that the Asian investors have bought a similar amount to what the US holders have sold suggests a direct transfer of coins between the two supplies.
Now, as for why this continued transition of supply has taken place, the main reason is likely to be the fact that the US has been tightening up regulations related to the cryptocurrency sector recently.
One of the most prominent examples of this has been the regulatory crackdown that Coinbase has observed from the Securities and Exchange Commission (SEC) recently.
At the time of writing, Bitcoin is trading around $28,200, down 1% in the last week.
BTC has surged in the past day | Source: BTCUSD on TradingView