Glassnode data shows that Bitcoin supply has recently seen a shift from wallets in America to those in Asia.
Bitcoin stocks held by Asian and American investors have been going in opposing paths lately
This is evident from data from the on-chain analytics company Glasnodean interesting dichotomy has recently emerged between the various regional supplies of the cryptocurrency.
Glassnode has divided the Bitcoin addresses into different regions based on the hours they transacted. “Geolocation of Bitcoin delivery is done probabilistically at the entity level,” notes Glassnode. An “entity” here refers to one or more portfolios under the control of a single investor (or group of investors).
“The timestamps of all transactions made by an entity are correlated with the working hours of different geographic regions to determine the likelihood that each entity is located in the US, Europe or Asia,” the analytics company explains.
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). However, in the context of the current discussion, only US and Asian deliveries are relevant.
Here is a chart showing the trend in the year-over-year change in supply in these two regional Bitcoin stocks over the past 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 shown in the chart above, US investors’ Bitcoin supply grew at an increasingly rapid pace leading up to and during the bull run in the first half of 2021 as year-over-year change continued to increase.
The change slowed down in the second half of the year, but still remained positive, suggesting that supply was still growing, albeit at a slower pace. However, in 2022, the supply started to decline, as the bear market took over and the LUNA and 3AC crashes happened.
The year-over-year change of the US-based BTC supply has since become increasingly negative and today stands at -7.5%, suggesting that the supply has shrunk by 7.5% since May 2022.
However, the Asian Bitcoin stock showed very contrasting behavior as it started rising just as the US investors started to divest their positions.
Interestingly, the pace at which the Asian traders’ supply has transformed is almost exactly the same as what the balances of the US-based wallets saw (although, of course, the change was in the opposite direction).
Currently, the year-over-year change in Asian supply is +6.9%. The fact that the Asian investors bought a similar amount to what the US holders sold suggests a direct transfer of coins between the two deliveries.
As for why this ongoing supply transition has taken place, the main reason is probably the fact that the US has recently tightened regulations regarding the cryptocurrency sector.
One of the most prominent examples of this is the regulatory crackdown that Coinbase recently observed from the Securities and Exchange Commission (SEC).
BTC price
At the time of writing, Bitcoin is trading around $28,200, down 1% over the past week.
BTC has surged in the past day | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com