US bitcoin supply dropped more than 10% in 2022

Since the middle of last year, the amount of the supply held and traded by U.S. entities has reduced by over 10 per cent

Bitcoin abandoned the US during the last year’s bear market, according to a new research.

In a tweet on June 8, on-chain analytics company Glassnode disclosed some outcomes about who is now using Bitcoin.

The past year has seen some seismic moves in where bitcoin is held and traded.

In its most recent research of the bitcoin supply, the analytics company tracked its movement across the globe — particularly, away from the U.S. and toward Asia.

Since the middle of last year, the amount of the supply held and traded by U.S. entities has reduced by over 10 per cent.

At the same time, Europe’s share has stayed almost equal, reflecting a redistribution from west to east.

A clear parting is seen in the YoY bitcoin supply change based on geographical locations. The extreme dominance of US entities in 2020-21 has clearly reversed, with US supply dominance declining by 11 per cent since the middle of 2022, according to Glassnode researchers.

European markets have been quite unbiased over the last year, whilst a considerable rise in supply dominance is seen across Asian trading hours, Glassnode stated.

The metric used to evaluate the phenomenon, YoY Supply Change, is a probabilistic tool that makes presumptions over bitcoin supply ownership based on the time at which it moves.

Geolocation of bitcoin supply is done probabilistically at the entity level. The timestamps of all transactions created by an entity are correlated with the working hours of various geographical locations to find out the possibilities for each entity being located in the US, Europe, or Asia, Glassnode details in its guidance notes.

The YoY Supply Change shows the U.S. share starting to drop in March 2021 but accelerating starting in May 2023.

The findings come as the geopolitical environment across the crypto sector sees big disruption of its own.

Hong Kong began permitting exchanges to offer trading this month, while in the West, U.S. legal proceedings against leading exchanges marked something of a landmark moment for the sector.

In an opinion piece for MarketWatch, Brian Armstrong, Chief Executive Officer of Coinbase — one of the targets of the legal action — cautioned that poor regulation would disadvantage the US.

Smart—and bespoke—regulation in the 1990s and early 2000s let the U.S. define the Internet Age, Armstrong stated.

He said: Just like then, now is the time for Congress to seize the historic opportunity presented by crypto, and pass extensive legislation that protects consumers and supports innovation.