Bitcoin Forum

I ran across this article from Coin Desk:https://www.coindesk.com/markets/2023/04/28/number-of-bitcoin-held-on-binance-surges-to-record-high-of-692k-btc/

 Market Analyst from Matrix port states that this isn't great news, and that this generally means that large amounts of Bitcoin may be set to be sold. I'm not sure, but that usually is a big indicator. Another point made in the article is that the increased amounts of BTC held on exchanges might renew investors confidence following the FTX collapse 'late last year' trying to make it seem like it was forever ago lol.

I think a lot of folks are still dismayed with all of the current scams casting a shadow on their confidence of crypto. I think things will turn around with time. They are calling for more regulations, which could be both good and bad for us. What are your thoughts on this?

Cheers,

TREAD93

Just wondering how an increase in the amount of Bitcoins held in an exchange "renews" investor's confidence?

Besides that, such stats mostly mean nothing because at the end of the day when the Bitcoins are sold, they just change hands to a new person who will hold them. It's not like they are going to be dumped somewhere in an exchange black hole in return for cash, never to be seen again

It's not something special to hear that Binance hold that amount of Bitcoin because it's currently the top exchange in crypto world. Investors are still not satisfied even with such good news because the fear has somewhat made a home in their brain. It's really hard to go with crypto again for many of the investors who were almost bankrupted by some scam projects.

I still believe that investors will at least consider Bitcoin as a viable option for long term investment because it has been performing up to the expectations of many investors and they might be speculating the price of Bitcoin for now to take some bold decisions later on. But, I'm hopeful that soon those investors will put their money into it as their confidence increases on it, until then I don't see huge investments coming to Bitcoin as of now.

The recent crash of FTX or Luna isn't the first, we've had different crashes in previous bear seasons. It can be said that every time bear season comes, the collapse of some organizations is inevitable. So I don't think this will demoralize investors, everyone is just waiting for the bull season and just once the bull season comes, everyone will quickly forget everything.
Regarding regulations, whether FTX collapses or not, regulations will also come, that is inevitable because the government can never let us be free forever. For me, regulation is bad, not good at all.

There are two things I can’t deduce from this, it’s either the bitcoin was transferred to binance by those heavily involved in trading on centralized exchanges with features of like spot trading and future trading, or many people sold off their Alticoins to purchase the bitcoin which is clearly a good idea.

But one thing that is alarming is the fact that people have returned back to trusting the centralized exchanges in holding their bitcoin again after all the saga caused by the FTX scandal. Personal I see this as a bad thing because people haven’t learn their lessons that it is best to have control of one’s funds than trusting even the top exchange. FTX was ranked third on list of top exchanges and still got into trouble same thing happened to Mt.Gox then, so i don’t see anything good in trusting binance once again

I have mixed feelings. On the one hand centralized exchanges are not ideal, they deviate from the initial idea of Bitcoin, they require KYC and they can sell your data or hackers can steal it. On the other hand, they are largely responsible for the price rising from less than a penny to tens of thousands of dollars because of the great liquidity they provide.


That's another one, that some exchanges may be scams or ponzi schemes like FTX, but hopefully this will become more and more unlikely.

I can't say anything about what indications might arise when there are lots of bitcoin on the exchange. But yes, all those bitcoins might be sold or maybe just used as FUD to make traders panic. In this case the number of bitcoin will decrease over time as they will be withdrawn to the wallet of each trader or investor regardless of whether it has changed hands or may have been withdrawn by the same user to their respective depository wallet.

The increasing number of bitcoins on the exchange can also be considered a reason why the exchange has such a good reputation, but who knows if Binance owns most of them? We can only speculate as to what might happen, but a centralized exchange is not a safe place in the long term regardless of who believes it.

Maybe if we think about it in passing then the increasing number of bitcoin reserves on the exchange does mean that many people are getting ready to sell when their target price has been met. But it could also be manipulation by big players. To try to create a bit of panic in the market. But I personally wouldn't be too affected by this. because I keep bitcoins for long term. but for those who are day traders on the stock then maybe they will be a little affected by such indications.

Of course, with all these regulations or any incidents related to FTX Exchange, are important right now in the cryptocurrency market. We must look closer on it because it will help the Bitcoin adoption, because I believe that in short term, the effect of these may be a huge but in the long run, you will not feel it. A lot of FUD spreading right now especially on exchanges.
Challeng on exchanges right now are how they will gain trust of a lot of people after incidents of lot of centralized exchanges recently.

I still believe that investors will at least consider Bitcoin as a viable option for long term investment because it has been performing up to the expectations of many investors and they might be speculating the price of Bitcoin for now to take some bold decisions later on. But, I'm hopeful that soon those investors will put their money into it as their confidence increases on it, until then I don't see huge investments coming to Bitcoin as of now.
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I agree 100%, investors can't ignore the charts and the long term growth percentage rates of Bitcoin. With time these charts will only begin to look so much better to consumers and investors alike and so many anti bitcoin folk will have to eat their words and realize that they can't find anything more secure and advantageous to their own financial well being than owning bitcoin and being in full control of your own private bank.

If you see an increase in Bitcoin holdings with large amounts being held on exchanges recently I don't think this is necessarily a negative development, as this could indicate new investors' confidence in the crypto market. A market analyst perspective may only be a reminder as from Matrixport who warned that the rise could be an indicator of the imminent large-scale selling of Bitcoin meaning that anyone entering the market should be considered and monitored.

Also in my view, given the current climate of fraud and fraud within the crypto market is a valid concern, and calls for increased regulation could be both positive and negative developments. On the one hand, regulations can help reduce fraud and increase stability in markets. On the other hand, overly or poorly designed regulations can stifle innovation and growth in markets.

Increased activity on exchanges shows increased activity in the market. The signs of more activity are more volatility/price changes, higher daily and weekly trading volume, and of course more coins being sent to that exchange because obviously when there are people buying bitcoin, there are also people selling bitcoin so they have to move their coins to exchanges.
This is not a sign of anything more.

Unfortunately, the mismanagement of clients' funds by these exchanges made this trust shaky, and therefore clients have the right to withdraw their money immediately after the completion of trading and leave the minimum possible amount in those platforms.

People's memory is closer to fish, so during the coming years, especially when Bitcoin breaks the $60,000 barrier, the platforms will find large financial flows, but the problem remains how many platforms will hold up until that time. The winter was severe and it seems that it will continue for a little while, causing some shocks.

We witnessed $30k price range in few days so people start selling their coins pushing high liquidity on these exchanges and Binance being the major CEX exchange with high volumes will definitely witness these scenes but I aslo think what else people take note from these as Binance volume indicates increasing profit margin for them only not any positive signs for the market as a whole.

Or it's just people moving from exchange to exchange, or taking advantage of Binance's staking/yield/whatever it's called these days.

Or just a set of events that aren't related to anything.

Even if it's for a great big sell wall, not really surprising that people are waiting to hit 30k again to take profit. I certainly would if I were a trader looking to start Q2 for my company announcing a 100% gain from the $15k buy in.

Since the beginning of January this year 2023, Bitcoin has maintained it stay in the green zone area of the market, possibly bringing back investors and day traders confidence back into the market, hence triggering the huge inflow of BTC into centralized exchanges like that of Binance for various transaction.

Secondly, having Binance not experienced any hitches and glitches so far in their running of Business, basically going bankruptcy, It definitely gonna make the exchange seem to be the most safe centralized exchange out there for people to trade and store their cryptos which is not, after the experience we had from the FTX collapse last year, In this case Binance may likely experience huge inflow of funds into the platform and not necessaryly that some whales wants to dump Bitcoin. It always Not your keys not your crypto.

That's right. There is also another fact to consider which is that Binance is mainly an altcoin exchange and majority of people trade altcoins with their bitcoins (they want profit on the bitcoin they own). With the recent market activity there has been an increased altcoin pump and dumps taking place in Binance, that means a lot of altcoin traders started moving their bitcoins to Binance so that they can participate in these altcoin pump and dumps. Hence the increased amount of bitcoin on Binance.

It could well be for the Binance EARN program, consisting of staking and liquidity farming. Confidence could have been rebuilt here indeed as Binance managed some of the rumors quite well when a lot has been withdrawn from their exchange. I think a lot of those who engaged in those EARN activities considered the opportunity cost too high in case something goes wrong. Now that it seems to have stabilized, they obviously reconsider depositing again.

If they were still skeptical, they would either deposit and sell right away or they wouldn't deposit and just wait. That doesn't make sense to me. They would take some action and not just risk deposits in a place that could go bankrupt, but not selling, only parking it there. Who would deposit loads of Bitcoin to then just wait and do nothing. I think we would have seen much more selling pressure if it was investors lining up to sell. Especially when they realize that others are depositing for that reason as well.

They just believe in Binance again after they witness that exchange successfully proceeded billion of dollar in user withdrawals in late of 2022 and early of 2023 under many fuds. Binance by their smooth withdrawal process and good solvent liquidity for their users, just reclaimed their trust after fud attacks.

Those programs can not help Binance if they fail to proceed withdrawals for their users in latest months when cryptocurrency investors were very panic after collapse of FTX exchange (insolvency) and some bank collapses.

They need to always keep this Reminder: do not keep your money in online accounts (https://bitcointalk.org/index.php?topic=5421039.0) in their minds.

Everything is good with Binance right now. There were not many scandals and everything was resolved peacefully. Compared to other exchanges Binance is the most successful exchange I know. It is their reputation that has made the brand and attracted so many Bitcoins. Of the exchanges that I am using, Binance is the most frequently used.

If you look at Bitcoin exchange balance for Binance (https://www.coinglass.com/Balance) (scroll down, select exchange) you will see there was also also a massive spike back in November last year at around $16K, very much near the lows. But within a month the coins were largely absorbed by the market with some sideways trading. So I wouldn't call it a "big" indicator. Also this uptick in exchange balance isn't really reflected by other exchanges, it's still relatively sideways and at similar lows to the start of the year, despite price increasing by 100%. If anything, taking exchange balances as an "indicator", it remains very bullish for Bitcoin.


If you look at all exchange balance (same link) then it's still very low. Lower than it was at $25K and still lower than the FTX capitulation around November 2022. The data on that chart also only goes back to May last year. Another chart (https://en.macromicro.me/charts/29045/bitcoin-exchange-balance-total) I just found shows how overall exchange balances are still at around 2018 levels since declining in 2020. So in the short-term, this Binance deposit is a blip on the radar it seems, and doesn't reflect overall exchange balances either. The fact that exchange balances remains the same/less than when price was around $16K indicates how few sellers there are right now.

I do not think that Binance is one of those places and that is why they are seeing a big increase. There were a lot of FUD and bad news about it going around, and even media worked towards trying to make Binance in a bad place, but none of that worked because nothing wrong about Binance came out, and people trust it.

This is why I believe that we shouldn't really work towards making that work, it should not really be working towards making Binance look bad, but work towards making it known as the most trusted one. If they could do that the nit would be a lot better. People realized this, and they are trusting and investing into it and there is no problem with it anymore, they are going back in after the FUD and making it even bigger.

That's why we all should hold our crypto on wallets and not on exchanges.
I think exchanges are good for people who are new to crypto and want to buy quickly and easily, but this is dangerous to hold crypto on them.

It's scary that people don't realize that any platform can go down in a blink of an eye and all your crypto could be lost. After all examples we saw I thought it would be pretty obvious.

Some people might move Bitcoin to Binance just for storage, I believe, especially if it's a migration from less reputable accounts. Some feel more comfortable with a centralized company in charge of their money because that's how it works with banks and because that allows restoring access to funds in case you lose your password or something. I wouldn't be so sure that all that money is set to be sold. I honestly don't mind, as long that this is a decision people make consciously, and they are ready to accept the risk of Binance going down at some point or experiencing a sort of hack that will not allow them to fully reimburse their users.

I was quickly trying to find out whether all those newly made deposits were from whales or rather large transactions or whether they came from the retail sector. In the retail sector there are quite a lot of holders that still feel safer to have their Bitcoin deposited at an exchange than to have it in their own wallet. Even though it is unlikely that Binance is going bankrupt anytime soon, I would still always prefer my own setup. Especially today when it takes you a couple of searches on Google and you know how to set it up and secure your keys. It is no big deal anymore to set something up that is secure enough for smaller amounts of crypto.

Reading the article, one thing everyone ignored :


I think a lot overestimate how much can some really hold coins, at one point when you're sitting with 10-20 million in your wallet you're probably wondering should I sell it now and enjoy life without headaches or should I still hold it for another 5-6 years to get 100 million but hope I would still not need blue pills to have fun.
Not every investor is 18 yo and can wait another decade, for some $30k-40k means enough to have a comfy life, why bother anymore?
As for the EARN program on Binance being another trigger, people never learn, do they?


Those spikes were caused by Binance moving coins around for their "proof of reserves" and then for their so-called audit, it wasn't caused by people depositing or withdrawing money but simply by Binance's new addresses not being counted, like those mysterious 120k bitcoins that are of course #safu  ;)