Coinbase keeps almost 1 million Bitcoins in its cold wallets

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According to the latest reports from the market, Coinbase keeps in its internal cold wallets almost 1 million Bitcoins.
If this a lot?
If we consider that so many individuals prefer to keep their hard-earned Bitcoins within the cold wallets of a crypto exchange, this makes us see Coinbase as a banking institution that is in charge of its customers’ financial assets.
If we try to do the math, we may see that the 1 million Bitcoins represent in fiat about $7 billion. We have to underline here that we are talking not only about Coinbase’s own supply of Bitcoin but also about its customers’ Bitcoins that have been transferred into the exchange’s cold wallets for maximum security.
If we have to look at some other exchanges following Coinbase, we should see BitMEX on the 2nd position with more than 260,000 BTC ($1.9 billion) and Bitstamp on the 3rd with more than 220,000 BTC ($1.6 billion).
If we go back to analyze Satoshi Nakamoto’s vision for Bitcoin and blockchain, we may see that the idea of having exchanges that control a large supply of Bitcoin is not something desirable as we obtain a centralization of power into the ‘hands’ of a few individuals and private entities.
Further on, this lack of decentralization is the main threat for the cryptocurrency space as we would actually replicate the present financial system of the world that is controlled by state institutions and banks.
Some pointed out that this development is a clear evidence that trading activities are turning exchanges into the new banks of the crypto sector and this could be a problem in the long term since we actually change one ‘master’ for another.
If we are to look for a positive element of this increasing level of centralization, we may say that crypto exchanges have no reason to play with users’ interests and they should rather be interested to see Bitcoin and altcoins’ prices rising for the benefit of all.
In the end, we have to emphasize that crypto exchanges continue to be targeted by state regulators and they would soon have to comply with Anti-Money Laundering and KYC demands. Though we may have an end to volatility and spectacular gains, we may also have an end to unstoppable pump and dump schemes that gave the crypto space a bad name.

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