Good and Bad at the same time - Mega entities hold $ 14 billions in Bitcoin

[Flexystar]

Reading through the coin desk's newsletter today I came across news about Robin Hood and it's holding analysis. Apparently the HOOD company has reached Top #3 in the list of who holds the most Bitcoin in the world.

Current stats:

Binance : ~ $6.3 billion
Bitfinex : ~ $4.3 billion
Hood     : ~ $ 3.0 billion

That's a lot of money under one roof of each entity mentioned above. It should make us think whether this is good or bad to Bitcoin economy? Since these much Bitcoin are under their custody they have full control of it and we have already seen what happens when such entities get hacked for their data leak. The case of FTX is the biggest lesson for us.

However, having that much significant amount can also be good for bitcoin economy since it is in holding for long terms. It is like having that much less Bitcoin in the circulation. It may or may not have an effect on the demand and supply but I wanna ask, does it have any?

Robinhood Revealed to be Third-Largest Bitcoin Holder With $3B in BTC
Robinhood transferred some 118,300 bitcoin to the wallet from several other smaller wallets over a three-month period.

Investing and trading platform Robinhood (HOOD) holds over $3 billion in bitcoin (BTC) in a single wallet that attracted the holdings over several months, wallet data from Arkham Intelligence shows. This makes it the third-largest bitcoin holder behind crypto exchanges Binance and Bitfinex, which hold $6.4 billion and $4.3 billion worth of tokens on single wallets respectively.
The wallet previously gained notoriety among market watchers in the past few months as the identity of its owners sparked conversations and concerns about who the mysterious owner of such a large amount of bitcoin could be.

As of Monday, Robinhood has not publically commented on these holdings.
The transfers sparked speculations ranging from the bitcoin holdings belonging to financial behemoth BlackRock, which filed for a Bitcoin ETF earlier this year, to crypto exchange Gemini shifting its users’ holdings to a wallet.
Robinhood transferred some 118,300 bitcoin to the wallet from several other smaller wallets over a three-month period, data shows. These tokens are custodied by crypto trading firm Jump Trading, Arkham representatives confirmed to CoinDesk in a Telegram message.
All of these holdings are held on the Bitcoin blockchain. The first transactions were made on March 8, after which huge amounts of bitcoin were transferred until July 14, data from BitInfoCharts show.
Meanwhile, the holdings shed light on the extent of Robinhood’s bitcoin exposure despite low crypto trading volumes on its platform.

Source: Robinhood Revealed to be Third-Largest Bitcoin Holder With $3B in BTC

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[avikz]

Very valid statement it is! But I see more bad in that compared to the good. It's like the real world wealth distribution inequality. That shouldn't have happened with Bitcoin at least. With such large holdings of Bitcoin, these entities do hold the power to manipulate the market at any point of time.

Even the government can step in and cease their holdings if any time the government wants to disrupt the crypto market. Really concerning!

[dimonstration]

I think it’s more on bad side since the distribution of supply is prone to manipulation. This company is holding Bitcoin for personal gain while the market will be heavily affected in case something bad happened to them just like what you stated or if they started to take profit.

It's really nice to see whales have confidence to accumulate Bitcoin but not this level that it controls massive coin that can affect the market badly.

Is there any data available on when they start accumulating and if they use exchange to slowly purchase their holdings?

[Faisal2202]

Dear you said, what will happen if these three companies got hacked and then used the example of FTX. I think you are mistaken as FTX was not hacked or anything else instead it was bankrupted due to less liquidity or some other types of scams.

And it does not really mean that these amounts are not in circulation because these amounts are in the liquidity pools from which traders are making there trades. I hope you do understand that the assets they have are in circulation and not in there holdings. But you can say that, the inflow and outflow almost remain equilibrium.

And to be honest if we look at the bad side then the impact will be a lot more than the FTX but still market is open for everyone and any exchange or any entity if have the potential to buy a lot of BTC then no one could actually stop them. But still there are pros and cons to everything but con here is for temporary time so chill and observe them. 

[ZAINmalik75]

That's a lot of money they are holding, but the overall market value of BTC is around 509 billion dollars, and compared to that, these $14 billion dollars are nothing. But the thing that puts some pressure on the community is the bankruptcy and downfall of these three exchanges. As a lot of people are using these exchanges. The trading volume of these exchanges is huge, and their downfall could put the market in the hands of manipulators.

One more thing: can we really say for sure that these entities are the biggest BTC holders because there are people who are totally under the radar and no one knows about them?

I think it’s more on bad side since the distribution of supply is prone to manipulation. This company is holding Bitcoin for personal gain while the market will be heavily affected in case something bad happened to them just like what you stated or if they started to take profit.

Having more BTC in a few people's hands does generate manipulation, but the market is open to everyone, and they have the full authority to sell and buy BTC. But in my opinion, these BTC they are holding are the golden eggs or Gloden Goose, and why would they kill the golden goose? While they could get golden eggs from it. If they lose the BTC, then they are the dumbest people, but they could also buy it again.

[Fiatless]

That's a lot of money under one roof of each entity mentioned above. It should make us think whether this is good or bad to Bitcoin economy? Since these much Bitcoin are under their custody they have full control of it and we have already seen what happens when such entities get hacked for their data leak. The case of FTX is the biggest lesson for us.  

FTX went bankrupt because of mismanagement by Sam Bankman-Fried' and this problem led to FUD that affected the price of Bitcoin and altcoins. But the price of bitcoin recovered after a few months. My prediction will still be the same, if anything happens to any or all of these top investors, the price will drop and recover after some time.

And it does not really mean that these amounts are not in circulation because these amounts are in the liquidity pools from which traders are making there trades. I hope you do understand that the assets they have are in circulation and not in there holdings. But you can say that, the inflow and outflow almost remain equilibrium.

I don't get your explanation that the coins are not in the custody of these exchanges. Any circulation of bitcoin between or within any centralized is in the custody of these exchanges. Although you have access to assets these exchanges are the holders or custodians. Any coin that is in circulation outside a decentralized wallet cannot be said to be in circulation.

[Yatsan]

That's a lot of money under one roof of each entity mentioned above. It should make us think whether this is good or bad to Bitcoin economy? Since these much Bitcoin are under their custody they have full control of it and we have already seen what happens when such entities get hacked for their data leak. The case of FTX is the biggest lesson for us.  

FTX went bankrupt because of mismanagement by Sam Bankman-Fried' and this problem led to FUD that affected the price of Bitcoin and altcoins. But the price of bitcoin recovered after a few months. My prediction will still be the same, if anything happens to any or all of these top investors, the price will drop and recover after some time.

And it does not really mean that these amounts are not in circulation because these amounts are in the liquidity pools from which traders are making there trades. I hope you do understand that the assets they have are in circulation and not in there holdings. But you can say that, the inflow and outflow almost remain equilibrium.

I don't get your explanation that the coins are not in the custody of these exchanges. Any circulation of bitcoin between or within any centralized is in the custody of these exchanges. Although you have access to assets these exchanges are the holders or custodians. Any coin that is in circulation outside a decentralized wallet cannot be said to be in circulation.

What would happen on that amount under their authority is something we won't avoid. But indeed, it would be wrong to generalize. We tend to relate FTX's issue with the likes but given that the two platforms have different management, then things would be different. Also, whether they choose to sell that huge amount of Bitcoin or not, we would be left with no other choice but to just ride the wave and hope for a fast recovery with the market price. For now, I would just be glad that huge investors are still into this technology 'coz worrying won't solve any problem. Let's just hope as well that more businesses would consider using this blockchain, for this industry's betterment in the future.

[TimeTeller]

That's a lot of money they are holding, but the overall market value of BTC is around 509 billion dollars, and compared to that, these $14 billion dollars are nothing. But the thing that puts some pressure on the community is the bankruptcy and downfall of these three exchanges. As a lot of people are using these exchanges. The trading volume of these exchanges is huge, and their downfall could put the market in the hands of manipulators.

One more thing: can we really say for sure that these entities are the biggest BTC holders because there are people who are totally under the radar and no one knows about them?

I think it’s more on bad side since the distribution of supply is prone to manipulation. This company is holding Bitcoin for personal gain while the market will be heavily affected in case something bad happened to them just like what you stated or if they started to take profit.

Having more BTC in a few people's hands does generate manipulation, but the market is open to everyone, and they have the full authority to sell and buy BTC. But in my opinion, these BTC they are holding are the golden eggs or Gloden Goose, and why would they kill the golden goose? While they could get golden eggs from it. If they lose the BTC, then they are the dumbest people, but they could also buy it again.

Such amount from these top holders are indeed small as compared to the overall market value of BTC.
However, as you said, any bankruptcy from any of these big companies will surely put some wave on the market.
It may not be long lasting but at such point, it will make a mark. And will give some disturbance for such time.
We have seen a lot of ups and downs in this market, and yet, btc always come back to where it was, and still growing stronger.
It may be owed to the fact that the existence of this market is not dictated by any big company, or any government or authority.
Hence, it can stand independently from all these entities surrounding this market. No any group can topple this market.

[livingfree]

50:50 on it.

50 like it's good for mass adoption and there's really no way to increase the adoption but through these bigger financial corporations.

50 as it's worrying if they dump continuously. They may not be able to dump all at once or have a single blow but they'll surely be able to find ways to dump if they have to.

[arwin100]

Very valid statement it is! But I see more bad in that compared to the good. It's like the real world wealth distribution inequality. That shouldn't have happened with Bitcoin at least. With such large holdings of Bitcoin, these entities do hold the power to manipulate the market at any point of time.

Even the government can step in and cease their holdings if any time the government wants to disrupt the crypto market. Really concerning!

For having that statistic maybe we can say that its more alarming to see that they have the volume acquired since if anything happens to them automatically it can affect the market. But we cannot do anything with it as those entities are big companies and the only thing we can do is atleast they remain safe from possible attacks or thinking that they will not do any crazy things like running away since they can create big impact negatively to the price of bitcoin.

[carlfebz2]

Very valid statement it is! But I see more bad in that compared to the good. It's like the real world wealth distribution inequality. That shouldn't have happened with Bitcoin at least. With such large holdings of Bitcoin, these entities do hold the power to manipulate the market at any point of time.

Even the government can step in and cease their holdings if any time the government wants to disrupt the crypto market. Really concerning!

Just as expected on which on the time that these big players/institutions/companies/government would be able to realize that holding Bitcoin would be worth then they would be no doubt on using up their financial

capability to take over or the advantage in the entire market which it isnt really that a shocking move or actions that they are doing.It might seems that they dont care but they are actually accumulating in silent.
Sooner or later if these big companies and institutions would be starting on accumulation because it do really symbolizes that having more would be having that greater power and dominance then for sure
it would be making out that huge impact when they do start on trying to hype on everything specially if they do decide with those Bitcoin ETF's approval.

Therefore, for us shrimps or retail traders or investors then its better to go with the flow and accumulate while they are really that still accumulating because anytime soon those positive bullish news
would just come out unexpectedly which it is really that a casual buy high sell low with these companies or simply entities.

[hatshepsut93]

That's a lot of money under one roof of each entity mentioned above.

That's not a lot, it's actually surprisingly low. 14B is less than 3% of total supply. And they control it but don't own it, since it belongs to their customers. Even if you add Microstrategy, Coinbase and other giants, it seems that the majority of all coins is held in private wallets, as they should be.

[Don Pedro Dinero]

Anyone complaining that these mega-entities have too much bitcoin should also complain about the price. And I don't mean complaining because it is now low for our expectations, but because without these entities the price would be much lower. Apart from entities like MicroStrategy that buy bitcoin to hold it by reducing the supply, the likes of Binance provide a liquidity and ease of exchange that without them the price would probably be below $1,000. Apart from the fact that I don't know how the price could be reliably calculated if the exchanges were basically P2P.

[inthelongrun]

Yes, a total of $14 billion bitcoin in just 3 exchanges is very huge. But then again, the market capitalization of bitcoin right now is more than $500 billion. So that $14 billion is like 2% of the current bitcoin valuation. These big exchanges may influence the price of bitcoin but probably only in the short term period.

This information tells us that the crypto market is still too young and low. The largest stock brokers in the world right now are the Vanguard Group and Charles Schwab with $8 trillion each while Fidelity Investments at #3 has $4.5 trillion.

[Yamane_Keto]

What is the point of mentioning the numbers in dollars, the price of bitcoin changes almost daily, which makes the difference in thousands of dollars, but if we assume that they own 118,300 bitcoins, then when $LUNA collapsed 98%, they had more than 80,000 bitcoin, and the Robinhood platform has investments in more fields than bitcoin.

Luna Foundation Guard (LFG), the non-profit organization holding Terra’s bitcoin reserves, confirmed on Monday morning that it had sold over 80,000 BTC over the past week to acquire TerraUSD (UST) in an attempt to defend its crumbling U.S. dollar peg.

I have read this quote elsewhere

At the end of June, Robinhood's customers owned about $4.2 billion in Bitcoin, along with another $7.3 billion in other cryptocurrencies such as Ether and Dogecoin, the company said in its earnings report earlier this month.

They have $4.2 billion in Bitcoin versus $7.3 billion in other cryptocurrencies, which means if something bad happens to Robinhood, the impact on Ether and Dogecoin will be very catastrophic.

[passwordnow]

Anyone complaining that these mega-entities have too much bitcoin should also complain about the price. And I don't mean complaining because it is now low for our expectations, but because without these entities the price would be much lower. Apart from entities like MicroStrategy that buy bitcoin to hold it by reducing the supply, the likes of Binance provide a liquidity and ease of exchange that without them the price would probably be below $1,000. Apart from the fact that I don't know how the price could be reliably calculated if the exchanges were basically P2P.

That's the hard reality without them the market wouldn't grow vastly. We have to embrace this reality that's happening that no matter how decentralized is the goal of Bitcoin, we can't stop these entities from holding large amounts because they're able to. Thus, this is for everybody, and them is part of everybody. If we're just able to invest billions like them, why not let this market alone circulate into individuals without them being part of it. But, that's not how it goes and whether we like it or not, these big corporations are always gonna be part of the revolution and innovation of the crypto market.

[Lucius]

That's not a lot, it's actually surprisingly low. 14B is less than 3% of total supply. And they control it but don't own it, since it belongs to their customers. Even if you add Microstrategy, Coinbase and other giants, it seems that the majority of all coins is held in private wallets, as they should be.

Exactly, these are the funds of their clients that are there because they trade with them, but there are probably also those who use these companies as banks, which is definitely not recommended. However, if you were to add up all the BTC that are in custodial wallets, you still get millions of coins that are at risk of being hacked or seized at any time.

It would be ideal for everyone to use non-custodial wallets, and to trade via DEX, but that is something that is hard to expect considering that people mostly choose simplicity at the expense of privacy and security.

[davis196]

I really can't understand some Bitcoiners.
On one hand, many Bitcoiners want big companies, investment funds and banks to buy more BTC and pump the Bitcoin price. On the other hand, there are Bitcoiners, who are bitching and complaining that "the big whales are manipulating the market" and "Bitcoin is under the control of a few big corporations". What do you people want? Mass adoption(including from the big corporations) or less adoption?
Two of biggest centralized crypto exchanges are holding Bitcoins worth billions USD. Is this supposed to be big news? Is this supposed to be bad news? To be honest, I don't care. Holding 6 billion USD in Bitcoins isn't such a big deal. The BTC market cap and trading volume are way bigger.
Yes, those crypto exchanges might collapse like FTX. And so what? I never used them. The people, who are using them do this at their own risk.

[Yamane_Keto]

We have to embrace this reality that's happening that no matter how decentralized is the goal of Bitcoin, we can't stop these entities from holding large amounts because they're able to.

The extent of bitcoin distribution among users will not harm the decentralization of the network, so no one can force you to sell bitcoin, even if the supply in the market decreases, the price will inevitably increase.
Imagine that out of a total of 21 million bitcoins, 12 million of them are in the hands of central parties. It is true that they can influence the price if they suddenly decide to sell bitcoins, but the presence of bitcoins with them will cause an increase in the price of bitcoins as long as they have diamond hands. Decentralization could be severely affected if there was a centralization of mining conditions and we had a pool or two, or an international regulatory framework was put in place to ban Bitcoin and imprison everyone who deals with it.

[Faisal2202]

I don't get your explanation that the coins are not in the custody of these exchanges. Any circulation of bitcoin between or within any centralized is in the custody of these exchanges. Although you have access to assets these exchanges are the holders or custodians. Any coin that is in circulation outside a decentralized wallet cannot be said to be in circulation.

I think I should not say that these assets are not in there holding as by holding means never withdraw it and hold it for longer period of time. I actually used the word holding to show that those money or assets they have in BTC is not some money that they can just hold instead they allow others to withdraw or deposit in that pool of money.

I hope now you understand what I meant before.