After the collapse of FTX, many investors no longer see centralized crypto exchanges. For example, you could previously read in the bitcoin news that the largest outflow of bitcoin (BTC) had taken place since January 2018. Confidence in crypto exchanges has clearly taken a big hit and investors are opting for it en masse self custody.
Binance dominates
Because of all the shifts that have taken place in centralized exchanges, there is also a new number 1 in bitcoin reserves. Binance, the world’s largest crypto exchange, currently holds 584,083 BTC in reserves. With this, the platform has even overtaken Coinbase which has a total of 533,048 BTC in reserves.
Thus, Binance CEO Changpeng Zhao (CZ) seems to be attracting many investors to his platform. He has indicated that his exchange owns customer credits 1 to 1 and there are no further outstanding debts. However, we have to take him at his word, since a so-called Merkle-tree Proof-of-Reserves is currently not yet available. Binance has already shared its own wallet addresses and is still rolling out a Proof-of-Reserves.
The number of bitcoin in Binance’s reserves represents approximately 2.78% of all 21 million BTC ever to enter circulation. However, a large part of the bitcoin is in their own wallets, which means that the CZ platform has a huge share of the market. After Binance, Coinbase has a total of 533,048 BTC in reserves, Gemini has a total of 158,918, and Kraken has 71,426.
Owned Bitcoin
A hardware wallet is considered the most secure way to store your cryptocurrencies. You are able to manage your own crypto yourself and you no longer have to trust any party. By storing your bitcoin at an exchange, most of the protocol’s innovations are lost. Bitcoin is revolutionary because it is decentralized, requiring no intermediaries. By putting your BTC on a hardware wallet, you maintain this basic principle.