[2020-10-15] 10% of all bitcoins are concentrated on five exchanges

[Best_Change]

10% of all bitcoins are concentrated on five exchanges

According to Chain.info, about 10.6% of circulating bitcoins are concentrated on only five centralized exchanges.

Today, Coinbase, Huobi, Binance, OKEx, and Kraken platforms keep about 1.96 million BTC.

Most of the coins are contained on Coinbase addresses – 944,904 BTC. They are distributed among 4.39 million wallets. This is most likely due to the storage services that the platform provides.

Second place is hold by Huobi with 323,665 BTC, followed by Binance with 289,961 BTC, OKEx with 276,184 BTC, and Kraken with 126,510 coins. The next seven exchanges - Bitflyer, Bittrex, Bitfinex, Poloniex, Coincheck, Gate.io and Bitstamp - collectively store about 210,000 BTC.

The data shows that many users still choose to accept the security risks associated with holding assets on centralized exchanges, despite the fundamental spirit of cryptocurrency decentralization.

Source: https://cointelegraph.com/news/five-mega-exchanges-hold-10-of-bitcoin-s-entire-supply

Read more news in our Medium channel: https://medium.com/@BestChange   

[TalkStar]

Most of the coins are contained on Coinbase addresses – 944,904 BTC. They are distributed among 4.39 million wallets. This is most likely due to the storage services that the platform provides.

Due to their tremendous service Coinbase is the most popular wallet for bitcoin holders. Specially their feature of sending instantly through email without any fees people love to use their platform. Usually crypto users prefer to complete their transaction as fast as possible and to get rid off this thing anyone can make faster transaction from Coinbase to Coinbase by using their email sending feature.
 

The data shows that many users still choose to accept the security risks associated with holding assets on centralized exchanges, despite the fundamental spirit of cryptocurrency decentralization.

Yeah its true that keeping assets on centralized exchange is risky but crypto traders don't think much about it where their only intention is to increase their fund by successful trades. Its only applicable for them who usually purchase bitcoin to hold it for a long time and have no interests in trading.

Basically traders try to minimize their transaction fees and that's why they directly use their favourite exchange as wallet. Although i don't think its a good decision to keep entire crypto assets on a established centralized exchange but you can put the amount which is enough for trading.    

[Mahanton]

10% of all bitcoins are concentrated on five exchanges

According to Chain.info, about 10.6% of circulating bitcoins are concentrated on only five centralized exchanges.

Its no brainer that majority of people will really be choosing up top platforms that had been commonly used by the majority.
10.6 % of circulating bitcoins isnt really that much though but still nice figures to look at when it comes on exchange volumes.
Didnt expect for Bittrex and Bitstamp didnt able to get the top 5 rank.

The data shows that many users still choose to accept the security risks associated with holding assets on centralized exchanges, despite the fundamental spirit of cryptocurrency decentralization.

DEX is preferred but we know that there are things which centralized exchangers are only capable on doing of. Ex. conversion of crypto to fiat vice versa.

[gentlemand]

Due to their tremendous service Coinbase is the most popular wallet for bitcoin holders.

It'll be Coinbase custody that accounts for several hundred thousand of those coins - https://custody.coinbase.com

It's not a particularly healthy situation but humans do love to centralise. What we need is a scare, ideally not a very damaging one, to remind people what's what. Everything's fine until it's not and when it comes to cryptoland that means full blown ugliness.

[stompix]

So, coinbase is losing coins, about 25 000 from the last count

According to data from news and information resource Longhash released on Jan. 23, Coinbase’s cold wallets contained around 970,000 BTC ($8 billion) as of Jan. 1.

But I wonder why they are not including Bitmex in these, according to some, BitMEX currently still holds between 135,000 and 170,000 bitcoin, so that would make them bigger than Kraken.

10.6 % of circulating bitcoins isnt really that much though but still nice figures to look at when it comes on exchange volumes.

But "circulating" is not really the best word describing the situation as 3.5 million coins have not moved in the last 5 years and they haven;t counted all the coins in all exchanges like my example above so the number might be closer to 20%.

[odolvlobo]

10% of all bitcoins are concentrated on five exchanges

According to Chain.info, about 10.6% of circulating bitcoins are concentrated on only five centralized exchanges.

Today, Coinbase, Huobi, Binance, OKEx, and Kraken platforms keep about 1.96 million BTC.
...

Only 10%? I'm surprised it is that low. I would expect it to be more like 50%.

[hv_]

Funny, on fractional banking you need to keep 10% of ppls money in the bank

 

[coolcoinz]

Only 10%? I'm surprised it is that low. I would expect it to be more like 50%.

There are many speculations as to how much of the total supply is lost. If that 10% of all bitcoin is taken out of the mined amount and we subtracted the lost coins, that 10% could double. If we added the mentioned above Bitmex to the mix the number would become even higher. Many people say that centralized exchanges are the weakness of Bitcoin and I tend to agree.

[bbc.reporter]

10% of all bitcoins are concentrated on five exchanges

According to Chain.info, about 10.6% of circulating bitcoins are concentrated on only five centralized exchanges.

Today, Coinbase, Huobi, Binance, OKEx, and Kraken platforms keep about 1.96 million BTC.
...

Only 10%? I'm surprised it is that low. I would expect it to be more like 50%.

That is not very helpful hehehe.

The fix to this problem is clearly to move away from a limited supply monetary policy to a an unlimited but predictable emmission. This will certainly not be accepted by the community, however.

[odolvlobo]

Only 10%? I'm surprised it is that low. I would expect it to be more like 50%.

That is not very helpful hehehe.
The fix to this problem is clearly to move away from a limited supply monetary policy to a an unlimited but predictable emmission. This will certainly not be accepted by the community, however.

I wasn't being sarcastic. If it is really only 10%, then that means that 90% of bitcoins are held by owners instead of custodians. That is good news.

Unlimited generation won't stop people from storing bitcoins in an exchange, so I don't know how that would fix the problem.

[Lucius]

I wasn't being sarcastic. If it is really only 10%, then that means that 90% of bitcoins are held by owners instead of custodians. That is good news.

That would be great news, but only the 5 biggest exchanges are considered here, and there are certainly hundreds of lesser known ones (some only locally) so that number is certainly more than 10%. No one mentioned blockchain.com, and it is one of the most popular online crypto wallet that is often the first choice of beginners.

Security is a very relative term in this case, is Bitcoin more secure on Coinbase or in a hardware wallet where the backup is stored in a bad way? Sometimes misunderstandings and a false sense of security that we have something under control can be completely counterproductive.

[Vishnu.Reang]

It looks like cryptocurrency users are still storing their assets in exchange wallets, despite the huge risk in doing so. I have lost my coins multiple times when exchanges went down, starting with Wex.nz in 2018. One of the reasons is that it is not very easy to store some of the altcoins. But then, there is no justification in holding Bitcoin in exchange wallets (unless you are a day trader).

[ChrisPop]

The concentration could be lower, but it is a reasonable amount. I'm glad that the high majority of Bitcoins are held in personal wallets (>> hopefully in cold wallets) 

I'm quite surprised that Bitmex or other trading platforms who offer high-leverage are not in the top.    Or maybe they weren't included in the study?

[bbc.reporter]

Only 10%? I'm surprised it is that low. I would expect it to be more like 50%.

That is not very helpful hehehe.
The fix to this problem is clearly to move away from a limited supply monetary policy to a an unlimited but predictable emmission. This will certainly not be accepted by the community, however.

I wasn't being sarcastic. If it is really only 10%, then that means that 90% of bitcoins are held by owners instead of custodians. That is good news.

Unlimited generation won't stop people from storing bitcoins in an exchange, so I don't know how that would fix the problem.

Agreed. However, it is certainly a fix to avoid the danger and possibility it becomes 90% held in exchanges and only 10% left in control of the real owners.

[odolvlobo]

Unlimited generation won't stop people from storing bitcoins in an exchange, so I don't know how that would fix the problem.

Agreed. However, it is certainly a fix to avoid the danger and possibility it becomes 90% held in exchanges and only 10% left in control of the real owners.

How would it avoid the possibility of 90% held in exchanges if it doesn't prevent people from depositing bitcoins in exchanges? And what exactly is the danger that you are referring to?

[DrG]

Funny, on fractional banking you need to keep 10% of ppls money in the bank

 

Isn't that the weird realization. Centralized money becomes weakened when it's too distributed and decentralized money becomes weakened when it's too centralized. That makes my head hurt, I need to eat some ice cream and make the headache worse.

That money that is counted "at" Coinbase, does that include the assets on their trading platform?

[Harlot]

The most interesting thing here is 2 out of the 5 exchanges are mainly operating in China which only means that China as a country alone is one of the active countries that is involve in Bitcoin. Aside from that I think people can come up to a conclusion that Bitcoin in China isn't illegal or something prohibited as they are really big when it comes to cryptocurrencies. I don't know if this is something to be alarm about or can be considered as a good news but these kinds of concentration in one country can be either use in bad or good.

[bbc.reporter]

Unlimited generation won't stop people from storing bitcoins in an exchange, so I don't know how that would fix the problem.

Agreed. However, it is certainly a fix to avoid the danger and possibility it becomes 90% held in exchanges and only 10% left in control of the real owners.

How would it avoid the possibility of 90% held in exchanges if it doesn't prevent people from depositing bitcoins in exchanges? And what exactly is the danger that you are referring to?

It might not prevent all people from depositing to exchanges, however, it will discourage people from hoarding and keeping much of them in exchanges.

It also prevents the exchanges from becoming similar to Ripple where they are holding and controlling most of the fixed supply of a currency after all coins have been mined.

In any case, I know we can agree that this is not good.



Where does most Bitcoin sit today? Roughly 60% of Bitcoin that is not lost is held by a licensed custodial service, or as FATF would refer to it, a Virtual Asset Service Provider (VASP). Most cryptocurrency exchanges would fall into this category, along with hosted wallets.

Source https://blog.chainalysis.com/reports/bitcoin-market-data-exchanges-trading

[Lucius]

The most interesting thing here is 2 out of the 5 exchanges are mainly operating in China which only means that China as a country alone is one of the active countries that is involve in Bitcoin.

We all know that crypto trading is officially banned in China, and Hong Kong still has a special status. Specifically of these 2 exchanges to which you refer Houbi today declares itself as a Singapore-based cryptocurrency exchange with offices in Hong Kong, Korea, Japan and the United States. OKEx is on the other hand a company that is relocated to Malta in 2018, although it has an office in Hong Kong.

Therefore, what China allows is crypto mining for the reason that it solves excess electricity, the country receives cash from the sale of BTC, and a large profit is made from the production and sale of mining equipment. All this is completely controlled and does not jeopardize the national currency.

[stompix]

The most interesting thing here is 2 out of the 5 exchanges are mainly operating in China which only means that China as a country alone is one of the active countries that is involve in Bitcoin.

OKEx is on the other hand a company that is relocated to Malta in 2018, although it has an office in Hong Kong.

Well, ironically he is quite right at this moment.
Before, even if an exchange was located in mainland China the coins were the property of customers who could have been from all over the world, but at this point, with Star Xu having all the cold storage keys (according to rumors) and being held in a Chinese prison, at this point China as a state really has a lot of coins in its pockets.

I doubt it, but if they really seize those coins this bull run is done for, with the bright side being that people will think twice before storing their coins elsewhere than their own wallets.