Bitcoin US To The Rest Reserve Ratio Has Shot Up Recently

On-chain data reveals that the Bitcoin reserve dominance of US-based platforms has recently spiked to an all-time high (ATH). Here's a breakdown of the observation and its potential implications.

Bitcoin US To The Rest Reserve Ratio Shows A Clear Trend

As highlighted by CryptoQuant founder and CEO Ki Young Ju in a new post on X, the platforms based in the US have seen their Bitcoin dominance grow recently.

The on-chain indicator that showcases this trend is the “US to The Rest Reserve Ratio.” This metric tracks the ratio between the BTC holdings of the American platforms and that of the offshore platforms.

The ‘platforms’ being considered here include not just the exchanges, but also the other large entities like spot exchange-traded funds (ETFs).

When the value of this metric decreases, it signifies a transfer of coins from the American platforms to foreign ones. On the other hand, an increase in the indicator suggests that the US-based entities are gaining dominance.

With that in mind, here's a chart that showcases the trend in the Bitcoin US to The Rest Reserve Ratio over the past decade:

The chart above shows that the Bitcoin US to The Rest Reserve Ratio fell below the 1 mark during the 2022 bear market. This indicated that the American platforms held a smaller share of the BTC supply compared to the offshores entities.

The indicator went on to consolidate sideways around its lows during 2023, but towards the end of the year, the trend finally shifted again, with the metric starting on a rise this time.

2024 then saw the indicator shoot back above the 1 level with a sharp surge. This trajectory of rapid increase continued throughout the year, except for a phase in the middle that coincided with the sideways movement in BTC's price.

The reason behind this rotation of tokens into the wallets associated with US-based platforms could be partially attributed to the introduction of spot ETFs in the US at the start of 2024.

These ETFs quickly became a popular alternate means of exposure into BTC's price action, and their presence might have contributed to the increase in on-exchange holdings.

Following the latest continuation of this rise, the Bitcoin US to The Rest Reserve Ratio has now reached a new ATH, indicating that the American entities hold 65% more BTC than the foreign ones.

In the current bull cycle, a growth in US dominance has been observed to be bullish for the asset’s price so far, just like it was during the 2021 bull market. Thus, this indicator may be one to keep an eye on in the near future, as any further increases in it might also lead to positive price action for the cryptocurrency.

BTC PriceA glance at BTC's price over the last 24 hours shows that the coin has only continued its recent bearish momentum. Its price has now dropped to $92,700 during this period.