On-chain data shows that US-based exchanges have recently seen their Bitcoin reserve dominance rise to a new all-time high (ATH).
The reserve ratio of US Bitcoin to other currencies has increased recently
As CryptoQuant founder and CEO, Ki Young Ju, pointed out in a new article mail On X, US-based exchanges have seen their Bitcoin dominance grow recently.
The on-chain indicator relevant here is the “US Reserve to Rest Ratio,” which tracks the ratio between US platforms’ BTC holdings and those of offshore platforms. “Platforms” here include not only exchanges, but also other large entities such as exchange-traded funds (ETFs).
When the value of this measure decreases, it means that coins are transferred from US exchanges to foreign exchanges. On the other hand, its rise means that US-based entities are gaining dominance.
Now, here is the chart shared by Young Ju that shows the trend in the US Bitcoin to Remaining Reserve ratio over the past decade:
The value of the metric seems to have been riding an uptrend during the last couple of years | Source: @ki_young_ju on X
As shown in the chart above, the ratio of US Bitcoin reserves to the rest of the currencies fell below the 1 mark during the 2022 bear market, implying that US exchanges owned a smaller share of Bitcoin supply than offshore entities.
The index continued to consolidate sideways around its lows during 2023, but towards the end of the year, the trend finally turned again, with the gauge starting to move higher this time.
2024 and then make the index rise above level 1 with a sharp rise. This rapid increase trajectory continued throughout the year, except for a phase in the middle that coincided with a sideways movement in the Bitcoin price.
This rotation of tokens to wallets tied to US-based platforms is partly due to the fact that spot ETFs were introduced in the US at the beginning of 2024 and have since established themselves as a popular alternative means of exposure to Bitcoin. Price action.
After continuing the recent rise, the reserve ratio of US Bitcoin to the rest of the currencies has reached a new ATH level corresponding to US entities owning 65% more BTC than foreign entities.
In the current cycle, the growth in US dominance has proven to be bullish for the asset price so far, just as it did during the bull market in 2021. Hence, it may be necessary to keep an eye on the indicator in the near future, as any further increases in it may also trigger a price movement. Positive for cryptocurrency.
Bitcoin price
Bitcoin has continued its recent bearish momentum over the past 24 hours with its price now down to $92,700.
Looks like the price of the coin has been sliding down over the last few days | Source: BTCUSDT on TradingView
Featured image by Dall-E, CryptoQuant.com, chart from TradingView.com
Comments are closed, but trackbacks and pingbacks are open.