Crypto Mining Shifts West and the United States is Now the Main Hub for Crypto Mining as China’s Mining Regulations Decrease Trading Volumes
An evaluation of trading volumes on main crypto exchanges has revealed a geographic shift in crypto trading activity.
Based on a report by crypto analysis firm Coin Metrics, essentially the most noticeable shift in geographic activity has been the reduction of volume on China-focused exchanges over the previous 12 months. This has been brought on both by the nation’s recent crackdown on mining, in addition to a renewed ban on most other actions associated to crypto, Coin Metrics wrote, while pointing to Huobi as an example.
“At the beginning of 2021, trading on Huobi accounted for roughly 15% of spot volume across the selected group of exchanges below. Today, that share is down to around 5%,” the report stated, referring to a chart that confirmed a decreasing share of volume being traded on China-focused exchanges like Huobi for example.
While Huobi’s share of the general bitcoin (BTC) trading volume decreased, exchanges like FTX and Coinbase – that are usually more common among Western customers – have increased their share of the BTC trading volume.
FTX’s share of bitcoin spot volume rose from 1% at the start of 2021, to 10% a 12 months later. At the same time, Coinbase noticed its share of the volume rise from 9% to 14% in the course of the 12 months, based on Coin Metrics.
The agency also stated that the identical pattern may very well be seen when looking at the different exchanges’ share of ethereum (ETH) trading volume. Nevertheless, a noteworthy distinction right here was that the share of volume traded on OKX (formerly OKEx), another traditionally China-focused exchange, has not seen that much of a drop.
Moreover, Coin Metrics touched on the previous speculation that a few of the promoting stress seen within the crypto market in direction of the tip of final 12 months might have been brought on by exchanges suspending service for Mainland Chinese language customers by the tip of the 12 months, main some customers to promote their belongings.
“It’s difficult to determine, but some have posited that this may in part explain some of the recent selling pressure towards the end of 2021,” the agency wrote.
In the meantime, the report stated that along with exchange trading volumes, on-chain data additionally supports the concept that activity is shifting out of China and transferring west.
“The proportion of total BTC and ETH supply on Huobi has fallen significantly,” the report stated. It added that US-focused exchanges “seem poised to capture an increasing share,” helped largely by the main shift of Bitcoin mining out of China and to the US, which has now turned out to be the epicenter of global Bitcoin mining.