Arkham on-chain data platform has identified that Coinbase controls 5% of the total Bitcoin supply. The Blockchain Intelligence platform determined that the exchange holds Bitcoin worth $25 billion in its wallets.
The exchange is said to own 947755 BTC out of the 19493537 BTC in circulation. This makes Coinbase the largest Bitcoin holder on the platform; the total BTC owned by the exchange is almost as much as what Satoshi Nakamoto owns.
Arkham: Coinbase holds 5% of BTC total supply
The platform reported on its X(Formerly Twitter) platform that it had identified over 36 Million BTC deposit and holding addresses used by the exchange. Its largest wallet contains 10K BTC; the exchange is likely to earn more unlabelled BTC, yet to be explored by the platform. This report affirms that Coinbase controls 5% of all BTC in supply.
Satoshi Nakamoto, the Bitcoin founder, was known to hold the largest Bitcoin wallet with about 1.1 million Bitcoin. Nakamotos’ absence and the decentralized ecosystem have reduced concerns regarding their massive holdings. Arkham platform report has affirmed Coinbase as the largest BTC holder.
Therefore, the community should pay close attention to the exchange’s actions as they may significantly impact price fluctuations in the industry.
Before Arkham’s report on Coinbase, the platform had uncovered similar findings on other exchanges in the crypto market. Grayscale, the notable Ethereum exchange, comes in second as the largest BTC and Ethereum holder as Robinhood ranked third.
The industry has had mixed reactions to this news. For instance, some members have expressed their concerns over the amount of BTC held by centralized exchanges, citing the risks that may face the crypto market if they were to collapse, as experienced by FTX late last year.
Members state that this indicates that they should withdraw their BTC from exchanges in case they were to halt withdrawals.Kirtash93 said, “Not your keys, not your coins,” adding that centralized exchanges are not the suitable spaces to HODL your BTC.
The Reddit user urged BTC holders to use the feature provided by crypto and store their coins on their cold wallets. Other members have expressed their optimism that centralized exchanges are more convenient, and those holding their coins on centralized exchanges do so because they prefer the convenience they offer.
Some also state that there are equally as many concerns over cold wallets, meaning there is no safer way to store their digital assets, and coin holders are now in a pick-your-poison situation. Among companies, business intelligence firm Microstrategy is still the largest corporate holder of BTC in the USA.
The Firm recently declared it owned 152800 BTC as of July 31. The company added more BTC to its balance sheet this year amid the bear market and overzealous regulation by the SEC. The company’s chairman stated that the regulation will eventually benefit crypto and, more so, Bitcoin, as it is already excluded from being a security.
Exchanges Vs. cold wallets debate
In light of the collapse of various exchanges last year, crypto members evaluate the risks centralized exchanges and cold wallets present for their assets. The community now seems split between storing crypto on exchanges and cold wallets. Cold wallets are arguably the best as they are more secure.
One controls what happens to their crypto for a long time compared to exchanges, which, once you deposit your BTC, may use them as their own, and one may not be able to control their assets directly.
Crypto hacks are rampant on exchanges, and the high volume of deposits often marks these exchanges as targets for hackers. As a result, investors are not convinced about depositing their crypto on these platforms.
The risk of using exchanges to store crypto is also heightened rehypothecation. This is where an exchange uses customer assets as collateral to another platform, as is the case in Coinbase, in an attempt to profit in its own activities.
Consumers may lose their funds if something happens to the exchange, as one does not have control over their assets. Wallets, on the other hand, tend to be less accessible and dependent on third-party devices, making them unsuitable to use when one needs quick transactions.
Arkham data platform has made a significant finding on Coinbase, identifying it as the largest BTC holder, controlling 5% of all BTC. The industry has to now look at all the exchange’s activities as they may be pivotal to the market fluctuations. As the debate between wallets and exchanges proceeds, it is undoubted that Coinbase is now a focal point for digital assets.
Source: https://www.cryptopolitan.com/coinbase-is-the-largest-btc-holder-arkham/