- U.S. entities’ Bitcoin holdings dropped by 64% to 612,472 BTC by September 2023, per CryptoQuant.
- Uncertain U.S. crypto regulations, supported by SEC Chair Gensler’s statements have contributed to this decline.
- European investors in contrast have seen the regulatory challenges as investment opportunities, with an inflow of crypto funds by $16 million.
In a recent analysis of Bitcoin’s geographical supply distribution, it has been revealed that the supply of Bitcoin (BTC) held by U.S. entities has been steadily decreasing since June 2022. According to data from CryptoQuant, the cumulative BTC balance of entities located in the United States has dropped by a substantial 64% over the past year, with holdings standing at 612,472 BTC as of September 26, 2023.
The decline in U.S. Bitcoin holdings has been attributed to a combination of factors, including rising interest rates and other economic factors. However, a significant driver of this trend appears to be the increasingly uncertain regulatory landscape surrounding cryptocurrencies in the United States.
Securities and Exchange Commission (SEC) Chair Gary Gensler reinforced this uncertainty in his testimony before the Senate Banking Committee on September 12, 2023. Gensler stated that crypto assets should be classified as securities and subjected to regulation by the SEC, asserting,
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.
In his more recent tesitmony before the House Financial Services Committee, Gensler reiterated his unwavering stand that cryptocurrencies and the entities operating within the crypto sector must be subject to federal securities laws.
The ambiguous regulatory environment has resulted in a surge in weekly outflows from digital asset investment products in the United States, with U.S. investors leading the exodus, as reported by digital asset investment firm CoinShares. In stark contrast, European investors have responded differently to the regulatory climate. CoinShares revealed that European investors poured $16 million into crypto funds in the previous week, viewing the regulatory challenges as an investment opportunity.
This shift in sentiment and Bitcoin holdings is not limited to the United States. Earlier this year, BTC experienced a significant price surge, reaching over $30,000 by April from a starting point of $16,500 on January 1st. During this period, U.S. entities reduced their BTC holdings by 2%, while international Bitcoin supply distribution increased by 9%.
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.
However, as global market sentiment soured towards the end of April, international investors also adopted a more cautious stance. This resulted in a decline in BTC’s international supply distribution as the cryptocurrency’s price stabilized within a narrow range.
