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With events such as SEC approval for Bitcoin ETFs and the introduction of cryptocurrency derivatives, it is easy to imagine that the market is driven by US news. However, new research suggests that Asia, and not the West, is the dominant engine of the Bitcoin price and cryptocurrency markets.
Western focus could be misleading
Jay Clayton, president of the US Securities and Exchange Commission (SEC), commented in June 2018 as part of his comments on the Commission's position regarding the presence of cryptocurrencies in securities or not, saying:
We (the SEC) did it for a long time and built a $ 19 trillion economy, a securities market that is the envy of the world, following these rules.
If it is true that the western hemisphere exerts a great dominance on the traditional business market, the same does not necessarily apply to the Bitcoin and the altcoin market. However, it is not uncommon to see the United States "trading experts"To argue that things like CME and CBOE BTC futures are driving the price of Bitcoin 00.
According to Mosaic, a data society and cryptocurrency company, developments in Asia have a significantly greater effect on the virtual currency market than in the western part of the globe.
The research company He says there have been 11 major news developments from Asia concerning cryptocurrencies. These securities have had an impact on the market of 18.61% on average.
The most significant of these developments came at the beginning of the year when CoinMarketCap removed data from South Korea's trade. According to Mosaic, this singular event has crashed in the market by over 57%.
Back in mid-2018 when the price of BTC rose from $ 6,200 to $ 8,000, many commentators indicated news coming from Asia. At that time, wealthy Chinese citizens turned to Bitcoin as a shelter while the government accelerated the devaluation of its currency.
Asia dominates the mining exchange and cryptocurrency
To begin with, Asia dominates both the mining and the exchange landscape. Even with the repression of China, other places like Singapore, Hong Kong, Japan and South Korea are points of reference for many cryptocurrency exchange platforms and related activities.
Why is this information relevant? Well, apart from the apparent conclusion of the trading volume, there is also the linguistic component. These Asian exchanges ensure that their services are offered in their local languages, bringing trade closer to the local population. With comparatively cheaper electricity, the region (especially China) is still a dominant player in the bitcoin mining industry.
At the start of this year, Arthur Hayes, CEO of Hong Kong's BitMex platform, said that the exchange of cryptography in Asia is more developed that in the West.
"Asia dominates the scrambles because they are very used to digital trading resources, and South Korea has exchanged digital gaming assets for two decades, when you move into a digital currency based solely on money, they understand it culturally, so they immediately agree, "he said. Therefore, it is obvious that news from that region would have a much greater influence on the market than the United States and Europe.
The researchers conclude that, due to the "key role" that Asia plays in cryptocurrency, "investors looking for a better idea of what drives encryption prices would do well to look to the east."
An influx of institutional investors based in the United States will shift the wave of domination to the western hemisphere? Please share your thoughts with us in the comments below.
Image kindly granted by Mosaic.io., Shutterstock
