Hey ninja’s, how’s the trading going? Since the halving of the largest cryptocurrency Bitcoin on the 11th of May, $220 million (24,000 BTC) has reportedly left crypto exchanges, according to data from on-chain market analysis platform Glassnode. The reason for users withdrawal of funds have been narrowed down to two possibilities, the first reason suggests that users simply no longer trust crypto exchanges with their funds.
Users have continually questioned the security of crypto exchanges and in turn the safety of their funds. 13% of the total circulating Bitcoin supply, over 2,300 ($21.7 billion) is being held by the top 10 crypto exchanges in-chain wallets and at the top of the list, Coinbase reportedly holds almost 1 million (5.2%).
The percentage being controlled by Coinbase is argued to be able to manipulate the market price of Bitcoin to their convenience. In recent years the volume of crypto exchange hacks has moved in an upward trend.
According to a 2020 crypto crime report from crypto data analytics group Chainalysis, in the last two years over $1.1 billion in cryptocurrency has been stolen from exchanges alone reaching an all-time high in 2019 with 11 attacks. The second reason suggests that users do not just view Bitcoin as a trading asset but as a store value.