- Selling pressure in Bitcoin and altcoins have subsided with BTC registering a good bounce back from under $26,000 levels.
- There is a shift in the global landscape of digital assets, with a movement of BTC supply from the West to the East, driven by rising regulatory scrutiny in the US and other Western countries.
With the US SEC slapping lawsuits on the world’s two largest crypto exchanges – Binance and Coinbase – Bitcoin (BTC) and the broader crypto market came under strong selling pressure. Amid heavy selling pressure, the BTC price tanked under $26,000 but recovered quickly and is now consolidating around $26,500.
So far, Bitcoin has managed to sail through strongly through the regulatory headings as well as the ongoing concerns about inflation and central bank hawkishness. On the other hand, the crypto market has also received a push from the US equity market which has given a strong bounceback this week.
Interest rates on government bonds, known as treasury yields, decreased. The number of people filing for unemployment benefits was higher than predicted, which made investors hopeful that the U.S. central bank would not increase interest rates at its upcoming FOMC meeting. Investors are also waiting for the Consumer Price Index (CPI) to see if inflation is decreasing. In an email to CoinDesk, Andrew Lawrence, co-founder and CEO of on-chain custody platform Censo, said:
It’s hard to imagine a tougher regulatory situation facing the digital asset industry in the United States than what’s happening right now. It can feel pretty bleak, and yet there’s been a tremendous resilience shown by Bitcoin and other key crypto assets. We saw a pullback that was far less pronounced than what happened during last year’s daisy chain of collapses.
Bitcoin and Crypto Assets Going Global
Digital assets are truly going global as we are seeing a major shift of hands from the West to the East, amid the rising regulatory scrutiny in the US and other Western countries. Looking to the East, countries like Hong Kong are bringing crypto-friendly rules swaying crypto industry firms towards them.
On-chain data provider Glassnode shows a clear shift in trend with the BTC supply moving from the US to Asian countries. In its latest report, Glassnode explains:
A clear divergence is visible in the year-over-year BTC supply change based on geographical regions. The extreme dominance of US entities in 2020-21 has clearly reversed, with US supply dominance falling by 11% since mid-2022. European markets have been fairly neutral over the last year, whilst a significant increase in supply dominance is visible across Asian trading hours.
Courtesy: Glassnode
Lawrence also attributed the strong resilience shown by crypto against market headwinds, to the growing adoption of digital assets outside the US. He particularly pointed to the rapidly growing trade volumes in Asian markets such as Hong Kong. Lawrence also appreciated the friendly regulatory frameworks developed in Dubai and the European market. He told CoinDesk:
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Digital assets are truly global. Longer term, this industry is poised to continue its exponential growth. I just worry that the bulk of this growth will occur outside of the United States – that is, if there are no developments in terms of the positive proposed legislation that is currently working its way through Congress.
Altcoins have also entered a phase of consolidation after heavy selling earlier this week. The world’s second-largest crypto Ether (ETH) is also currently trading at around $1,830 levels. Selling has also subsided in tokens mentioned in the SEC lawsuit i.e. BNB, ADA, SOL, and MATIC.
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