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With more assets moving into Binance, market sentiments may suggest that investors believe Binance to be safe.
Cryptocurrency exchange Binance has become the largest bitcoin reserves holder, beating Coinbase and several other top exchanges. According to data from CryptoQuant, the exchange currently holds about 584 083 BTC valued at $9.34 billion in its reserve.
Coinbase follows closely with 533,048 BTC. Bitfinex, Gemini, and Kraken make up the rest of the top five holders, with 345,534 BTC, 158,918 BTC, and 71,426 BTC respectively.
Why Binance Bitcoin Reserves May Have Surged
While BTC is moving into Binance, reports suggest that many investors are moving their BTC out of centralized exchanges. CryptoQuant reported on Sunday that the outflow of BTC between November 14 and November 19 stands at 742,401 BTC.
There’s not much of a surprise here. Following the FTX collapse, BlockFi and paused withdrawals further corroded investor confidence in the safety of centralized exchanges. Consequently, there has been an increased call for self-custody.
Binance CEO also lent his voice to the call for self-custody, tweeting that investors have a right to self-custody but must do so with care. Likewise, there was a surge in hardware wallet sales as more investors take custody of their assets. While many of these BTCs moved into hardware wallets and DeFi, a picture of Binance reserves suggests a huge chunk also made its way into the cold wallet.
Compared to when Binance published proof of reserves, a total of 109,083 BTC has moved into Binance. If the values are accurate, that would mean 2.77% of the total Bitcoin supply sits within the Binance exchange.
Is Binance Safe?
With more assets moving into Binance, market sentiments may suggest that investors believe Binance to be safe and not headed for bankruptcy. This may be partly due to Binance’s attempts to detail its cold wallet reserves. According to Binance’s proof of reserves published on November 11 the firm has enough reserve funds to cover its $12 billion daily trading volume.
Further, unlike Alameda Research which held a large portion of its equity in FTT, Binance has just $6 billion in BNB. This accounts for less than 10% of the reserves. More than half of the $65 billion assets are denominated in USD stablecoins, while Bitcoin and Ethereum account for the rest.
Again, CZ has stated that the firm does not participate in large-scale trading or loaning. He tweeted, “We don’t have loans, we don’t have debt.” Going by all this, Binance seems to be a safe bet for investors for now.