Why I am pulling all my coins from Centralized Exchanges

[iconoclast]

Besides the risk that you run from hacks that steal your coins there is another even better reason for not keeping your coins on centralized exchanges.

Enlightened Self Interest.

A large volume of the selling that is currently happening in cryptocurrencies and particularly in Ethereum is coming from people short selling. Short selling is when you put up some collateral with an exchange and then borrow coins against that collateral that you sell into the market and then hope to buy back at a lower price and return to the exchange to cover your negative position. The difference between the price you sold and then bought back would be your profit. Short positions in Ethereum are at record levels.

Now if you are a long term investor in cryptocurrency and are holding coins on a centralized exchange then you are inadvertantly increasing the supply of coins available to short sellers. If however they were in your wallet or on a decentralised exchange they would not be available to short sellers. If enough people did this the short selling would dry up and the shorts would have to scramble to cover their short positions which would drive prices up. This is called a short squeeze. Now I have no reason to believe that me moving my coins will bring this to pass. But I am going to do it simply because I don't like the idea of other people using my money to work against my interests.

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[IgorShumilo]

You wrote a good message. I liked the way you think and I agree with you. Oddly, now there are decentralized exchanges, but people still want to use centralized exchanges, perhaps this is due to the fact that they do not want to understand the advantages of decentralization. I hope in the future people in crypto will become more literate!

[askmecrypto]

Point well made. And personally, I never keep my coins on exchanges. Let it be security reasons or simply not allowing exchanges utilizing your coins for shorting or long.
Plus a lot of tokens have been moving to POS so keeping them in your wallet instead of exchanges gives you stake rewards as well.

[iconoclast]

Here is a chart that shows you how much short interest has increased at Bitfinex.

[caisa88]

This is a good message that you send. I also don't like to keep my funds on centalised exchanges, but mainly because of the risk of getting hacked. I just make the trades that i want to do, and withdrawal my coins right after that.

[SummerHamster]

It’s a great message for the investors and i totally agree with you but peoples are using centralize exchange. They do not understand the decentralized exchanges benefit. I hope in near future their perception will change.

[Luckycoins999]

This is really valuable news that you shared with the community. This will help people to think about using the centralized exchange as many people are not aware of the disadvantages of this exchange and they are also not aware of the advantages of the decentralized exchange.

[Docnaster]

I don't think that shorting is really responsible from the drop from $1.4k to <$200, let's be realistic here. The market sentiment is horrible all across the board, even cryptos that don't have margin trading available are dropping like bricks. Sure, shorting probably isn't helping, but when you combine that with ICO sell-offs and general FUD, it's quite obvious why we're seeing this river of red.

[ChainFish]

The message that you have shared is absolutely valuable and this will help many people to think about using the decentralized exchanges. We have seen that many people use centralized exchange as they do not understand its bad effect. This post will really help them to understand.

[BitCoinGuy10]

Keeping the coins in the exchanges for a longer period of time is a bad move. It will be better if you have a good wallet which provides top notch security and keep the coins there instead.

[Rangerman]

keeping the coins in the exchanges for a longer period of time is a bad option. Instead it will be better if the coins are kept in wallets which has a good security.

[tenebriscaelum]

This is also to make the prices of cryptos lower to make a bull trap to investors which is quite frustrating and it is not the exchanges fault but the short sellers. Also even though that the price of ETH is going down in decentralized exchanges there are tokens that are getting good uptrend which is quite a good option.

[Wolfwar]

This is also to make the prices of cryptos lower to make a bull trap to investors which is quite frustrating and it is not the exchanges fault but the short sellers. Also even though that the price of ETH is going down in decentralized exchanges there are tokens that are getting good uptrend which is quite a good option.

Perhaps you are right, but you do not need to exclude the fact that it's so Motive can be a trap. We all know about the prospects for crypto currency in the future, and almost 90% of all projects created coins on the erc20 platform. Therefore, the drop in the price of the etherium does not mean anything.

[Walero]

This is more reason i like bank than the bitcoin exchange. A centralised exchange that got hacked should be able to reimborse those that were affected but instead na grammar they will be blowing here and there.

[diamondroyal]

Well said, is better to store ur coin in an offline wallet than exchange

[priscadavids]

Wow! This is a great post but however many people still prefer the centralized exchanges because decentralized exchanges is still far from offering great user experience. People still find it difficult to understand decentralized exchanges and decentralized exchanges still have to step up their craft to compete with the centralized.

[CryptoCoinArbitrage]

I keep  coins on exchanges only I am trading with as  of security reasons . This is an interesting view on shorting
and exchanges I was not quite aware, however I do not think that shorting is the cause for ETH price drop as it
is earlier on downtrend and downward  spiral just continue.

[gabrielkings]

Truely people don't realize the benefit of decentralized exchange and that's because there is no proper awareness yet. But hopefully soon enough the importance will be well known.

[marks1976]

I don't think that shorting is really responsible from the drop from $1.4k to <$200, let's be realistic here. The market sentiment is horrible all across the board, even cryptos that don't have margin trading available are dropping like bricks. Sure, shorting probably isn't helping, but when you combine that with ICO sell-offs and general FUD, it's quite obvious why we're seeing this river of red.

Even vitalik has created FUD to the market. Remember a lot of regulators has been pulling a lot of new regulation and SEC has rejected all of the ETF applications and that could be a disaster.
So many reasons to support the fact that the market is so horrible right now. In fact they are not understand about that.

[xWolfx]

I believe you have an interesting opinion.

Taking into account all the data breaches and exchanges losing their coins due to hackers it is definitely not a crazy stance, i also believe that trend will continue for some time still. The motivations are big and the difficulty is not set high enough still.

When people is holding - Having a big amount of coins saved, its definitely a good idea to buy a hardware wallet and store them there. Doing their best to keep them safe.

Make sure to protect your coins not only from Exchanges losing them but also some natural disaster when you have them.