Coinbase Holds a Whopping 966,230 Bitcoin ($7B) in Cold Wallet

[Diazlek]

Coinbase Dominates The Market
Coinbase is recognized for being one of the crypto exchanges with a very user-friendly interface and large liquidity.

This time, the exchange shows it holds 4.6% of the total Bitcoin supply that could ever be mined.

The funds the company holds in its cryptocurrency cold wallet are the reserves that the exchange has in case users want to withdraw their funds.

It is worth mentioning that not all this amount of money is owned by Coinbase. These funds are the ones that the exchange holds on behalf of the users that are trading on the platform.

Coinbase provides custody to users. Individuals are not able to hold their private keys while using the Coinbase platform.

The funds Coinbase is currently handling are equal to $7.91 billion.

The data provided by BitUniverse shows that Coinbase is ahead of other competitors. Indeed, the next top 5 exchanges would have to combine all their funds if they want to hold more BTC than Coinbase.

BitMex is the second exchange with the largest number of BTC held. They have 265,140 BTC, worth $1.97 billion.

Other exchanges include Bitstamp with 229,490 BTC, Bitfinex with 146,120 BTC and Kraken with 136,780 BTC. These funds are valued at $1.71 billion, $1.54 billion and $1.4 billion.

Several exchanges have been accused of having fake volumes. This allows companies to attract a larger number of users considering many would prefer to trade in a platform with large liquidity.

Despite having the largest funds held in cold storage, Coinbase didn’t register the largest trading volume in 24 hours.

BitMex handled $2.49 billion on the first day of December, followed by Coinbase with $118.65 million and Kraken with $86.37 million.

BitMex provides users with the possibility to trade with leverage up to 100x. Coinbase is known as the user-friendly exchange, while the other platforms have different features and solutions to distinguish themselves from competitors.

Exchanges must be very careful with how they handle their funds considering hackers could be targetting these platforms and try stealing some funds.

Coinbase is also known for having very secure security solutions that were never publicly vulnerated by an attacker. Other platforms were hacked in the past and many of them had to stop operating.

 Read more at: https://coinspace.com/news/exchanges/coinbase-holds-over-966-million-bitcoin-its-cold-wallets

[joniboini]

How did they get that number in the first place? Is it from transaction fees or there are a lot of people who keep their assets on Coinbase? It's hard to believe for me.

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

[pawanjain]

$7B worth of bitcoins is just too much for any exchange to hold. It's risky for them as well as their customers. These days, exchanges are getting hacked like it's a piece of cake for the hackers.
What if these funds are stolen by a hacker or the exchange scams it's customers just like Mt. Gox.
I just hope that their customers don't hold more amount of crypto in Coinbase. It's risky for them to hold crypto in Coinbase when knowing the numbers are public now and the exchange is more prone to getting hacked.

[o_e_l_e_o]

How did they get that number in the first place? Is it from transaction fees or there are a lot of people who keep their assets on Coinbase? It's hard to believe for me.

Mostly other people storing their assets, but a bit of their own profits as well.

Coinbase state that they have 30 million users. 966,230 BTC works out as only 0.032 BTC per user. Not that hard to believe, especially when you consider there are several users trading hundreds or even thousands of bitcoin on Coinbase. Additionally, with Coinbase taking anywhere between 0.05% and 0.5% from both makers and takers, that works out as 0.1% to 1% of profit on a daily volume of over $55 million for BTC markets alone, giving them a profit of probably somewhere around 50 BTC every day just in trading fees from BTC markets.

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

There isn't enough liquidity to dump 1 million BTC on the market at once. Anyone who is smart enough to be able to hack Coinbase's cold wallets is smart enough to realize that, and would likely just trickle the funds in slowly. The converse to that is that as soon as news broke that 1 million BTC had been hacked, loads of people would panic sell and the market would dump anyway.

[btc_angela]

$7B worth of bitcoins is just too much for any exchange to hold. It's risky for them as well as their customers. These days, exchanges are getting hacked like it's a piece of cake for the hackers.

And with this news, maybe Coinbase will also be the prime target for hackers, because it just attract those cyber criminals to step up their game.

What if these funds are stolen by a hacker or the exchange scams it's customers just like Mt. Gox.
I just hope that their customers don't hold more amount of crypto in Coinbase. It's risky for them to hold crypto in Coinbase when knowing the numbers are public now and the exchange is more prone to getting hacked.

Not your keys, not your coins, simply as that. If you understand that then you won't leave huge funds in Coinbase or at least any exchange for that matter.

[blckhawk]

Similar thread here: https://bitcointalk.org/index.php?topic=5206249.0

Although this seems to be more appropriate in Bitcoin Discussion. It's true that risks can be found in such a way of handling funds. If the wallet holder decides to get it all though, it would be a lot of risk to him/her since his/her identity is known already, unless the private keys are "stolen" (as they might say), in which case solid evidence must prove the theft. And it would be hard for the thief to get it in cash/fiat because the address used to steal such amount would be closely monitored for transactions, as the blockchain is transparent.

[BitHodler]

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

I'm not too worried about Coinbase getting hacked. They don't seem to have been hacked as far as we know and they only keep 2% of their holdings in hot wallets for people to withdraw conveniently.

2% of nearly 1 million is still a lot, but I'm pretty sure that Coinbase has enough security measures in place to block suspicious withdrawals, especially when they are unusually large.... something other exchanges can learn from.

[Velkro]

Coinbase Holds a Whopping 966,230 Bitcoin
I just hope that their cold wallet would remain in safe hands.

It doesnt matter safe or not, it should NOT happen, ever.
Its too much BTC in one place, it should be decentralized.
Worst case here is that its people bitcoins that they just don'y withdraw and they SHOULD.
Imagine someone would hack 966000 bitcoins now... it would CRASH price and trust in bitcoin for looong time.

[Dabs]

It's likely that many users just leave a small amount on Coinbase, including both BTC and fiat, so they can do some trading. Coinbase isn't really a bid/ask type of exchange though, unless this number also includes Coinbase Pro, which is the real exchange.

[stompix]

How did they get that number in the first place? Is it from transaction fees or there are a lot of people who keep their assets on Coinbase? It's hard to believe for me.

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

The source is bituniverse
Linking the image as it's a weird format size.

What I can't wait for is the release of data for other exchanges, they say they will publish the data on the 12th.
I'm sure we're going to have a lot of surprises.
Bitstamp is doing less than 0.1% of the global volume but is holding 1.25% of the total number of bitcoins (including satoshi's)
Also bitmex is holding 10% more than bitstamp but is doing 40x times the volume.

Grabbing some popcorn!!!

[squatter]

Bitstamp is doing less than 0.1% of the global volume but is holding 1.25% of the total number of bitcoins (including satoshi's)

What do you mean by "including satoshi's?"

It's likely that many users just leave a small amount on Coinbase, including both BTC and fiat, so they can do some trading. Coinbase isn't really a bid/ask type of exchange though, unless this number also includes Coinbase Pro, which is the real exchange.

I suspect that a huge number of people use Coinbase as wallet -- same as Mt. Gox back in the day. I assume the numbers here include Coinbase Pro since their wallets are associated.

[stompix]

Bitstamp is doing less than 0.1% of the global volume but is holding 1.25% of the total number of bitcoins (including satoshi's)

What do you mean by "including satoshi's?"

They hold 1.25% of the total coins mined till now, including the coins that have never been moved like the ones attributed to satoshi.
I was trying to suggest that the percentage is a bit higher if we cut the numbers down to 16-15 mils coins that are not lost or locked forever.
On the other hand volume clearly is done with coins that can be moved (or fake bots)  

LE, to combine replies:

The problem with not including suspected coins that are lost or locked forever is we don't know for sure if they are. We know a certain amount is lost forever due to certain qualities or it was sent to burn addresses or something like that, and that's only less than a few thousand provably lost.

The rest are still unknown and will remain unknown. Coins that haven't moved in 5 to 7 years can still be owned by the same people and still have access to them, merely not just moving them or spending them.

Yeah but this is the part of the math I was talking.

They have 0.1% of the volume, that volume is made with coins that we suppose been moved in the last 12 months.
On the other hand, they have 1.25% of the total coins including the ones that might be lost forever.
So if after 12th December when the next numbers are published and we find out that all the exchange held about 50% percent of all the coins even mined, the number will grow in Bitstamp's favor.
They would still be doing 0.1% of the volume but (in this scenario) they would hold 2.5% of all the coins held by exchanges!

Anyhow I assume there will be some long faces when exchanges claiming billions in trade would be uncovered with 200 BTC in cold wallets.

[Dabs]

The problem with not including suspected coins that are lost or locked forever is we don't know for sure if they are. We know a certain amount is lost forever due to certain qualities or it was sent to burn addresses or something like that, and that's only less than a few thousand provably lost.

The rest are still unknown and will remain unknown. Coins that haven't moved in 5 to 7 years can still be owned by the same people and still have access to them, merely not just moving them or spending them.

[alyssa85]

How did they get that number in the first place? Is it from transaction fees or there are a lot of people who keep their assets on Coinbase? It's hard to believe for me.

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

Loads of people keep their assets on Coinbase. It's because the bitcoin blockchain is now so large, people who just access the net via their phones prefer to use an online wallet, rather than set up their own wallet on a dedicated laptop.

I just hope Coinbase have good security installed.