As US regulatory pressure continues to weigh on the cryptocurrency industry, a new trend is starting to change, changing the dynamics of global demand for bitcoin.
The US political environment tends to tighten the regulatory noose around the neck of the crypto and mining sectors, which may cause traders within its borders to lose faith in bitcoin’s resilience.
This shift is evident through Glassnode’s bitcoin year-over-year (YoY) supply change, which tracks the amount of bitcoin held by regional entities.
The CryptoSlate analysis found that the supply of bitcoin in the US is set to decline by 11% year over year through June 2022.
In contrast, the Asian crypto market showed an increase in the supply of bitcoin. According to data from Glassnode, institutions operating during Asian trading hours have increased their bitcoin holdings by 9.9% since June last year, the highest level ever.
Asia’s attraction to bitcoin raises questions about the possible driving factors behind this shift.
As previously reported on CryptoSlate, increasing regulatory heat in the US has prompted traders to shy away from bitcoin and ethereum, turning instead to the perceived safety of stable coins. This defensive move by traders demonstrates the tangible impact of regulation, or the threat of it, on the behavior and decisions of cryptocurrency market participants. The risk of potential compliance-related penalties and clampdown can sometimes encourage a safe play at the expense of higher-yielding investments.
While US regulations cast a shadow over the crypto market, Asia is experiencing a more positive wave of regulatory changes.
As reported by CryptoSlate, Hong Kong’s Securities and Futures Commission (SFC) has paved the way for a more crypto-friendly environment, indicating the licensing of more than eight crypto companies by the end of the year and the opening of crypto exchanges. Simplifies regulatory requirements for
In response to these favorable changes, some crypto entities, such as CoinX, have strategically taken advantage of Hong Kong’s crypto-friendly regulations.
Meanwhile, Bitget has committed to invest $100 million in strengthening the Web3 ecosystem in Asia. Furthermore, growing speculation about a possible bitcoin treasury holding in a Central Asian country reflects regional sentiment towards bitcoin.