Coinbase Wallet Quickly Approaching 1 Million Bitcoin

Cryptocurrency exchange data is notoriously hard to analyze reliably. There are several exchange ranking sites on the internet, but many of them use metrics that are largely speculative and cannot be verified. Luckily, Bitcoin’s immutable blockchain provides the possibility for data firms to conduct analyses of on-chain transfers. This is exactly what the information resource company Longhash decided to do in order to determine which exchanges held the most assets in cold storage.

Coinbase is King

Using data from chain.info, Longhash was able to make a relatively accurate estimate of the total number of coins held by various major exchanges. Here’s what they found:

First: Coinbase has by far the highest amount of Bitcoin of all crypto exchanges, and its holdings grew substantially over the past year. Moreover, that growth was relatively steady, apparently unaffected by the up-and-downs in prices. It is set to exceed the 1,000,000 threshold very soon.”

Shifting Sentiment

This rapid accumulation of cold storage assets is indicative of a shift in the sentiment of crypto holders. If you have spent any time in the crypto space, you have probably heard the term “not your keys, not your coins.” Although this is true, people do not seem to mind as long as the exchange is reputable. Coinbase’s market dominance will only further attract institutional investors that are looking to get into long positions and aren’t too concerned with short-term fluctuations. Coinbase may be able to use this large amount of capital to offer more enticing interest rates to those who choose to use their services. Either way, Coinbase’s steady approach to the 1 million BTC threshold makes them by far the most dominant exchange in the industry.

How Do Other Exchanges Compare?

Longhash also analyzed the cold storage data of other major exchanges and compared their numbers over the past year. This gave them the ability to speculate about what specific events influenced the amount of assets in storage. Here is the graph:

Binance was relatively dominant for most of 2019 among all exchanges other than Coinbase. It is interesting to note that in November of 2019 Huobi saw a massive jump and surpassed Binance. Many analysts have asserted that a large portion of PlusToken transactions were laundered through Huobi, an event that coincided with that spike in November. Injections of capital can come from a number of sources, including scams, and significantly influence exchange volume.

Data Doesn’t Lie

There are plenty of metrics to measure exchange volume that can easily be synthesized like rankings on the app store or unique web page visits, but cold storage metrics exist on-chain and are difficult to fake. Although it is not entirely perfect, this data still provides valuable insight into the volumes and revenues of various cryptocurrency exchanges. In the future, institutional investors may look to these figures in order to determine which exchanges are most equipped to handle their capital. There is immense value in reliable data, and fortunately, the blockchain does not lie.

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