The United States has never been the largest market for Bitcoin or cryptocurrencies in terms of trading volume. Offshore exchanges, particularly in Asia, have consistently dominated global trading activity, with platforms like Binance and Huobi driving liquidity and volatility.
However, the US has always held a unique position as the most influential force in the crypto industry. It has historically set the tone for the rest of the world, shaping the development and perception of Bitcoin as a legitimate asset class.
This dominance can be observed through the pricing discrepancies and supply distribution metrics that reflect the behavior of US-based market participants. Two key indicators — the Coinbase Premium and the US to The Rest Reserve Ratio — offer a window into the evolving role of the United States in the global Bitcoin ecosystem.
These metrics track the premium of US exchanges over offshore platforms and the proportion of Bitcoin held by US entities relative to the rest of the world, illustrating regional demand and supply distribution.
The Coinbase Premium is a proxy for US demand, reflecting periods when US investors drive Bitcoin’s price higher than on offshore platforms. Conversely, a negative premium often indicates that offshore markets dominate price discovery.
Meanwhile, the US to The Rest Reserve Ratio shows accumulation trends of US-based institutions, exchanges, and custodians compared to global counterparts. Together, these metrics reveal the interplay between US and offshore markets and the underlying shifts in sentiment, regulatory influence, and institutional adoption.
The impact the US presidential elections had on the market is clearly visible in the Coinbase Premium and reserve ratio data. These changes show how regional sentiment responded to the prospect of a more crypto-friendly regulatory environment in the US.
The Coinbase Premium chart reveals significant volatility in US demand in the past three months. The premium remained negative in early September, suggesting weaker buying pressure from the US, which indicates that offshore exchanges drove Bitcoin’s price. However, as Bitcoin’s price began to rise at the end of the month, the premium shifted, occasionally turning positive.
The deviation reflects intermittent periods of strong US demand, likely driven by speculation on the outcome of the elections. Bitcoin saw a sharp rally in mid-October, yet the Coinbase Premium turned decisively negative, indicating that offshore entities, particularly in Asia, were the primary drivers of this price increase. The negative premium during this rally also suggests that US-based traders were engaging in arbitrage by taking advantage of lower prices on Coinbase Pro compared to offshore platforms like Binance.
The US to The Rest Reserve Ratio tells a parallel story of rising institutional accumulation in the US. Despite the negative premium during October’s price rally, the reserve ratio steadily climbed, indicating that US-based entities added to their Bitcoin holdings.
By late October, the reserve ratio saw a sharp uptick, coinciding with speculation around the US election and expectations of a pro-crypto administration. Following *****’s victory on Nov. 5, the reserve ratio surged even higher, reflecting increased accumulation by US-based institutions and custodians.
Interestingly, the Coinbase Premium turned positive in late November, aligning with a stabilization in the reserve ratio. This shift indicates that US retail traders re-entered the market, causing an uptick in demand on Coinbase Pro. The renewed buying interest from US traders came as Bitcoin’s price stabilized around $95,000, showing how the announcement of favorable crypto policies boosted sentiment and demand within the US market.
While offshore exchanges dominated price movements in earlier months, the steady rise in the US reserve ratio demonstrates growing institutional confidence and accumulation within the US This trend was amplified following *****’s election and talks of a strategic Bitcoin reserve, which signaled a renewed commitment to positioning the US as a leader in the crypto industry.
US-based entities’ steady accumulation of Bitcoin suggests a long-term shift toward institutional adoption and regulatory clarity. *****’s policy announcements have reinforced this trend, likely accelerating the US’s position as a dominant force in Bitcoin markets.
However, the negative Coinbase Premium during key price rallies highlights the ongoing influence of offshore markets, particularly in driving short-term volatility.
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