KEY POINTS
- Bitcoin transactions in North America account for 73% of all crypto activity in the region
- North America-based users tend to hold and accumulate Bitcoin while the rest of the world actively trade them
- Users in North America have more Bitcoins in their wallets than than those in other regions
While Bitcoin remains the most popular cryptocurrency around the world, it is more popular in North America, where 73% of all crypto transactions involve the benchmark cryptocurrency.
A new survey by analytics firm Chainalysis shows that North Americans favor Bitcoin over altcoins like Ether, which only accounts for only 17%. Stablecoins account for 11% in trading activity. This is in contrast with other regions, like in East Asia where altcoin activity is at 33% and in Central and Southern Asia where it sits at 35%.
Because there’s lesser altcoin activity in North America, the region naturally accounted for more “hodlers”, which refer to individuals who buy cryptocurrency and do not sell for a long time. “Hodling”, the act of not spending, is often associated with Bitcoin than with altcoins. It follows that other regions, especially East Asia have a higher frequency of trading activity. This is explained by data gathered by the research firm from six exchanges that have North America and Europe-based users and six exchanges with a large number of East Asia-based users.
North America-based users also have the most number of Bitcoins in their wallets compared to users in other regions. The study showed that while wallet addresses based in North America only account for 15% of all crypto activity, the region leads over others in terms of the balance in these addresses. The research firm suggests users in North America are most likely accumulating and holding and not trading, which explains the large funds in the addresses.
Trading activity and Bitcoin preference in North America are also explained by the increasing number of professional and institutional investors in the region. Professional traders, defined as those who hold above $10,000 worth of cryptocurrency, accounted for 925 of the region’s transfer volume. Among this, 57% are transfers above $1 million, which, according to Chainalysis, are institutional investors.
The growing interest of institutional investors in Bitcoin has been noted by Investment firm Fidelity in its June 2020 report. Upon surveying around 800 institutional investors in the west, 36% said they have digital asset investments while 60% said they are considering digital assets in their portfolio. This percentage is expected to increase because the Office of the Comptroller of the Currency (OCC) has recently announced that federal banks can custody crypto.
Chainalysis noted that one key thing to observe in the next few years is whether traditional investors will continue to use crypto native companies to custody the Bitcoins they accumulate or begin using the service of mainstream financial companies like banks.