Bitcoin, the world’s largest cryptocurrency, has experienced a significant shift in its geographical distribution, with new research suggesting that the United States has witnessed a decline in Bitcoin ownership during the 2022 bear market. Glassnode, an on-chain analytics firm, recently analyzed Bitcoin’s supply, revealing a noteworthy migration away from the U.S. and towards Asia.
Glassnode says the supply fell by 10%
According to Glassnode’s findings, the supply of Bitcoin held and traded by U.S. entities has decreased by over 10% since mid-2022. In contrast, Europe’s share has remained relatively stable, indicating a redistribution of Bitcoin from west to east.
The researchers at Glassnode noted a clear divergence in the year-over-year BTC supply change based on geographical regions. The dominance of U.S. entities that was evident in 2020-2021 has markedly reversed, with U.S. supply dominance falling by 11% since mid-2022. Meanwhile, Asian trading hours have witnessed a significant increase in Bitcoin supply dominance.
Glassnode employed the Year-over-Year Supply Change metric to measure this phenomenon. The tool makes probabilistic assumptions about Bitcoin supply ownership based on the timing of transactions. By correlating the timestamps of transactions with the working hours of different geographical regions, the probabilities for Bitcoin entities being located in the U.S., Europe, or Asia are determined. The decline in the U.S. share of Bitcoin ownership began in March 2021 but accelerated notably starting in May of this year, as revealed by the Year-over-Year Supply Change metric.
The regulatory climate is shaping the distribution of Bitcoin
These findings align with the current geopolitical landscape surrounding cryptocurrencies, which has experienced substantial upheaval. Hong Kong recently permitted exchanges to offer cryptocurrency trading, while the United States has seen legal proceedings targeting major exchanges. Such developments have prompted discussions about the impact of regulations on the cryptocurrency industry.
In an opinion piece for MarketWatch, Brian Armstrong, CEO of Coinbase, cautioned against poor regulation that could disadvantage the U.S. He emphasized the need for smart and tailored regulations, similar to those that enabled the U.S. to define the Internet Age in the 1990s and early 2000s. Armstrong urged Congress to seize the historic opportunity presented by cryptocurrencies and pass comprehensive legislation that safeguards consumers while fostering innovation.
Regarding the influence of China on the cryptocurrency narrative, Armstrong noted that it came as no surprise, considering the country’s active involvement in shaping the industry. The research by Glassnode highlights the changing landscape of Bitcoin ownership, with Asia emerging as a dominant region. As the dynamics of the cryptocurrency market continue to evolve, it remains to be seen how this shift in Bitcoin ownership will impact global crypto markets and the development of regulatory frameworks worldwide.