- The number of Bitcoins held in U.S.-based wallets have declined steadily since 2022.
- BTC’s price consolidation in the past few months has impacted international supply distribution.
The supply of Bitcoin [BTC] held by U.S. entities has been steadily declining since 2022, according to a recent analysis of the leading coin’s geographical supply distribution.
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Data from CryptoQuant showed that the cumulative BTC balance of entities located in the U.S. has trended downward since June 2022. With a geographical supply distribution of 612,472 BTC as of 26 September, U.S. entities’ BTC holdings have dropped by 64% in the past year.
In a recently published report by pseudonymous CryptoQuant analyst SimonaD, in addition to “rising interest rates and other economic factors,” this shift is largely attributed to the country’s increasingly uncertain regulatory landscape.
Reiterating the stance on crypto in the region, Securities and Exchange Commission (SEC) Chair Gary Gensler, in his testimony before the Senate Banking Committee hearing on 12 September, stated that crypto assets are securities and should be regulated by his agency.
According to Mr. Gensler:
“There is nothing about the crypto asset securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws…Given that most crypto tokens are subject to the securities laws, it follows that most crypto intermediaries have to comply with securities laws as well.”
The uncertain regulatory outlook on crypto in the U.S. has led to a surge in weekly outflows from digital assets’ investment products in the region. According to weekly reports published by digital asset investment firm CoinShares, investors in the U.S. have accounted for most of the outflows from crypto funds in the past few weeks.
In its most recent report, CoinShares found that European investors have mostly reacted differently. Last week, the region reported inflows totaling $16 million into crypto funds. According to CoinShares, European investors “see recent regulatory disappointment as an opportunity.”
Poor sentiments have affected “hodling” habits worldwide
In the first quarter of the year, BTC’s price surged astronomically. The uptick came as the general market recovered from the aftermath of the unexpected collapse of cryptocurrency exchange FTX [FTT] in November 2022.
As of 1 January, BTC traded at $16,500. As demand increased and sentiment improved, the coin’s value rallied above $30,000 by April, jumping by over 80% in just four months.
Despite this rally, a divergence in sentiment from a regional perspective was spotted. While U.S. entities reduced their BTC holdings, data from CryptoQuant showed that the coin balance in wallets outside the U.S. climbed between January and April.
Between 1 January and 30 April, BTC’s supply distribution among U.S. entities fell by 2%. Within the same period, BTC’s supply distribution internationally climbed by 9%.
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However, after the general market sentiment turned sour by the end of April, international investors adopted a more cautious approach. BTC’s international supply distribution dwindled as the leading coin’s price dawdled in a tight range.
According to data from CryptoQuant, at 1.22 million BTC at press time, the coin’s international supply distribution has plummeted by 8% since 1 May.