Bitcoin found to be a P2P currency that has dramatically gained popularity in the world and hold $355 billon worth of market cap. but the question is, how much bitcoin decentralized is?

before getting into it, we break down “decentralized” ?

Basically, decentralized is refers to the concept that is not centralized. For bitcoin, the term ‘decentralized’ is mainly attributed due to the nature of the digital ledgers it holds.

So the question is how decentralized is bitcoin in terms of moments in bitcoin prices?

Even more importantly, it is happening in the US, not Europe, not India, but in the US. Take, the weekend price data of bitcoin, ie., when the US markets are closed, and compare it to when they are open.

We learn that there is an interesting connection, that the bitcoin market moves more than when the US markets are open. In fact, bitcoin’s hourly returns were about 0.1% during market open hours compared to about 0.04% when markets were closed.


Source: Coinmetrics

To this, Coinmetrics stated in their report, that the sample size, although small, and does not necessarily provide a definitive answer,

“We are starting to see some interesting evidence of growing institutional involvement, and will continue to investigate and dive deeper moving forward”

What does this mean?

Bitcoin is largely concentrated in the US, mostly due to its openness to new technology. The US was among the first to regulate cryptocurrencies and provide clear rules on its classification as a new asset class, taxing it, etc. The same was seen in Singapore, Europe, etc.

Hence, in these regions, there are investors exploring this asset class. However, in countries like India, where an outright ban was enforced by the central bank, not so much. In fact, a survey conducted by an Indian exchange CoinDCS showed that people are still finding it difficult to invest in bitcoin.

In countries with clear regulation, institutional investors have the opportunity to take advantage of bitcoin’s massive returns. Rightfully so, many companies and individual investors have done the same. Unlike retail, institutional investors are the big money and hence, move the price on a much larger time frame.

Despite being decentralized, bitcoin and the broader crypto market is localized to the US markets. While other countries are slow to regulate, some are catching up to bitcoin and hopefully, in the future, bitcoin becomes a truly decentralized global market.