In the last few months, there has been a significant shift in the location of Bitcoin holdings, with data from Glassnode showing a movement of wallets from the United States to Asia. Glassnode, an on-chain analysis firm, divided Bitcoin addresses into different regions based on the hours in which they conducted transactions and analysed these accordingly. The three main regions analysed were the United States, Europe and Asia. However, for the purpose of this discussion, only the deliveries from the United States and Asia are relevant.
A chart showing the trend of changes to the Bitcoin supply held in these two regional stocks over the last year illustrates this shift in location. The chart indicates that the values of the two metrics have developed in opposite directions over recent months. In the lead-up to and during the bull market in the first half of 2021, the supply of Bitcoin held by US investors grew increasingly rapidly, with the change from the previous year consistently increasing. This change slowed during the second half of the year, although it remained positive, indicating that the supply was still growing, albeit more slowly. However, in 2022, the supply began to decline as the bear market took hold and crashes of LUNA and 3AC occurred.
The annual change in Bitcoin supply based in the US has since become increasingly negative and currently stands at -7.5%, indicating that the supply has shrunk by 7.5% since May 2022. In contrast, the Asian Bitcoin supply showed very different behavior, beginning to rise just as American investors began to divest their holdings. Interestingly, the speed at which the Asian traders’ holdings changed was almost exactly the same as that of the balances held in US-based wallets, although the change, of course, occurred in the opposite direction.
At present, the annual change in Asian supply stands at +6.9%. The fact that Asian investors have bought roughly the same amount that US holders have sold suggests a direct transfer of coins between the two suppliers.
The main reason for this ongoing change in supply is likely to be the tightening of regulations in the cryptocurrency industry in the United States in recent times. One of the most prominent examples of this is the regulatory action taken by the Securities and Exchange Commission (SEC), which Coinbase recently observed.
As for the price of Bitcoin, at the time of writing, it is trading around $28,200, which represents a 1% decline over the past week.
