Fri. Aug 19th, 2022

New research shows that seven cryptocurrency exchanges hold about $25 billion worth of BTC and ETH, despite the high number of exchange hacks in 2019.

January 3 Marks Proof-of-Keys Day

Some cryptocurrency enthusiasts celebrated the second annual Proof-of-Keys day on the 3rd of January 2020. This day is set aside to encourage people to withdraw their cryptocurrencies from centralized exchanges and to store them in cold wallets for better security.

Volume precedes price.

The Proof-of-Keys day, which was started by Trace Mayer, is now in its second year. Interestingly, many crypto users are keeping their funds with cryptocurrency exchanges, a move that has been deemed risky by most crypto experts around the globe.

Seven Exchanges Hold $25 Billion Worth of BTC and ETH

Despite the Proof-of-Keys day, it was found that $25 billion worth of Bitcoin and Ether, the two leading cryptocurrencies, are held by seven cryptoexchanges. This is according to data obtained from the research done by the blockchain surveillance firm Chainalysis.

According to the report, Coinbase currently has over 1 million Bitcoin in its possession, which is valued at around $8.4 billion. This data was also supported by another report done by Bituniverse, using their Exchange Transparent Balance Rank (ETBR). The ETBR shows that Coinbase held around 966,000 BTC in the first week of December 2019. However, this figure has surged to 1.03 million BTC by January 2020.

Additionally, Huobi comes second in terms of cryptocurrency reserve, as it holds 462,000 BTC (valued at around $3.8 billion), 1.8 million ETH, as well as a large number of Tether(USDT). Binance comes in next with roughly 307,000 BTC (valued at around $2.5 billion) as of Saturday, 25 January, and 2.6 million ETH, in its possession. Bitfinex occupies the fourth spot by holding 290,000 BTC, valued at around $2.8 billion. The others on the list include; Bitmex with 274,000 Bitcoin, valued at $2.28 billion;and Bitstamp which is holding 242,000 BTC valued at around $2 billion. The other exchanges making the top exchanges also include Okex which in possession of 211,000 Bitcoin (valued at around $1.83 billion); Kraken with 173,000 BTC at a value of around $1.8 billion, Bittrex which is currently storing 125,000 BTC (valued at around $1.2 billion), and finally, Gemini with 95,000 BTC, valued you at around $922 million.

Exchanges Hold BTC and ETH Despite Increasing Hacks

The research above makes it evident that people are continuing to store most of their cryptocurrencies on exchanges, instead of in cold storage wallets, despite the increasing hacks faced by exchanges. Last year saw the most exchange hacks in a year since the cryptocurrency space came into existence more than a decade ago.

Chainalysis, in its report, mentioned that although there were more attacks on exchanges in 2019, the amount stolen was less than that of 2018. In 2018, the amount stolen from exchanges was valued at over $800 million. However, this figure dropped to $282 million in 2019. None of the attacks in 2019 were equal to the $534 million hack of Coincheck in 2018.

The analysis company mentioned that malicious hackers are getting smarter with their tactics. Despite the fewer funds stolen from exchanges in 2019, most crypto and security experts have stated that storing cryptocurrencies on exchanges is very risky. The high profile hacks, such as Coincheck, Mt. Gox, Binance, and others, over the years should serve as a deterrent to people who wish to save their crypto reserve on exchanges.