A new trend is emerging in the cryptocurrency industry as U.S. regulatory pressures continue to weigh heavily on the market, altering the dynamics of global Bitcoin demand. The political environment in the U.S. is seeking to tighten the regulatory grip on the crypto and mining sectors, leading traders within its borders to lose faith in Bitcoin’s resilience. This shift is evident in Glassnode’s Bitcoin year-over-year (YoY) supply change, which tracks the amount of Bitcoin held by regional entities. According to CryptoSlate analysis, the Bitcoin supply in the U.S. has experienced an 11% YoY dip since June 2022.
In contrast, the Asian crypto market has experienced a surge in Bitcoin supply. Glassnode data shows that entities operating during Asian trading hours have increased their Bitcoin holdings by 9.9% since June last year, an all-time high. The rise in Bitcoin supply in Asia has sparked questions about the driving factors behind this shift.
As previously reported on CryptoSlate, mounting regulatory heat in the U.S. has led traders to pivot away from Bitcoin and Ethereum, turning instead to the perceived safety of stablecoins. This defensive move by traders demonstrates the tangible impact that regulation, or the threat of it, can exert on the behavior and decisions of cryptocurrency market participants. The risk of potential compliance-related penalties and clampdowns can incentivize a safer play, sometimes at the cost of high-yield investments.
While U.S. regulations cast a shadow on the crypto market, Asia has been experiencing a more positive wave of regulatory changes. Hong Kong’s Securities and Futures Commission (SFC) has paved the way for a more crypto-friendly environment by signaling the licensing of over eight crypto companies by year-end and easing regulatory requirements for crypto exchanges. In response to these accommodating changes, some crypto entities, such as CoinEx, have strategically leveraged Hong Kong’s crypto-friendly rules. Bitget has also committed to investing $100 million to bolster Asia’s Web3 ecosystem. Furthermore, mounting speculation about a Central Asian country’s potential Bitcoin treasury holding reflects a shifting regional sentiment towards Bitcoin.