Your favorite altcoins path to becoming the next Bitcoin is a lot more treacherous than you think.

The CEO of uPlexa (UPX) told CCN.com about the financial and ethical minefield faced by upstart altcoin projects in the cryptocurrency industry. Kyle Pierce the projects co-founder and lead developer paints a miserable picture of an industry that may already have been taken over by its worst people.

The king-making ability of centralized exchanges is no secret. The CEO of DigiByte (DGB) claims he was asked for $300,000, plus 3% of his 58th ranked altcoins entire coin supply, to get listed on Binance.

The demands made of the 1,371st-ranked uPlexa were equally outrageous. According to Pierce:

Weve had offers for 50% of the premine to get listed on an exchange. 50% of our premine thats allocated to exchange listings, marketing, hiring, founding team, core members, security audits, etc. They somehow believe that one hour of their time is worth nearly 6,000+ of our current man hours into this project.

Pierce says the saturation of centralized exchanges is making matters worse. Over 1,500 exchanges now compete for the same territory. As that number increases, the desperation of each rises accordingly.

Theres 1500+ centralized exchanges that offer the exact same service, and theyre starting to lose volume. So they artificially boost the volume and hire VAs to go around soliciting every team member of every project in hopes to quickly make a quick buck before their watering hole dries up.

These exchanges have become a choke-point for the cryptocurrency industry. The only way to get listed is to play their game. That means new cryptocurrency projects have their development plans dictated to them before theyve even begun.

For projects who did not participate in the IEO/ICO stages and have no funding, it is nearly impossible to get listed on an exchange. So, firstly, not only are people predominantly trading on centralized exchanges in a decentralized area, but the exchanges that are making huge sums of money are killing off the potential for real-world technologies to get noticed/adopted.

Another exchange told Pierce they would be happy to list his project, if only they moved away from the whole privacy thing.

Pierce told us that when uPlexa finally got listed on its first exchange (for around 1 BTC), even more scammers emerged from the woodwork. Pierce says he was contacted by someone asking to buy 20 BTC worth of UPX over-the-counter for 30% less than its market price.

The stated plan was to become invested in the coin, and then get behind its marketing efforts for their own benefit and that of the community. Pierce was suspicious, but he directed the buyer towards a miner with large UPX holdings.

After promoting the coin for two days and then moving on, Pierce realized the buyer was basically a pump and dump artist, who buys coins at a markdown then sells them for profit.

At this time, I had pretty much told them to f*ck off with their pump & dump scheme after reading about other groups who participated in major supression of other coins and then trying to sell to their group of investors who they make calls to on a daily basis.

According to Pierce, these solicitations are not uncommon. In fact, he thinks the cryptocurrency industry is largely dominated by these market manipulators.

Most of the time, when you see people talking about cryptos, its because they already got their bag at a cheap price and are looking to unload their bag at a quick 2x profit on you. Investors come into the market looking to make 5-10x (which, yes, may be unreasonable in most circumstances), only to be eaten alive by these types of manipulators.

Pierce states that even cryptocurrency influencers are twisting the screw as hard as they possibly can. When reaching out to Twitter and YouTube content creators, he found that every one demanded close to half a Bitcoin just to talk about uPlexa.

Every single one expected to be paid anywhere from 0.35-5BTC to talk about our technology. It became very clear to me at that moment, that 99% of all media regarding cryptocurrencies is paid by projects with massive amounts of funding. Little to nothing in the crypto world is organic.

Almost every service imaginable seems to be hidden behind a paywall in the cryptocurrency world. Even those which are free, such as CoinMarketCap listings.

we had a flock of different users advertising new services to us: CMC listings (even though this is free), exchange listings, supposed market making services, and even dumping strategies. One user even went so far to say they could help us sell our entire premine on the exchanges without market selling, which was obviously not in our interest.

Every service offered by exchanges comes at a cost. If an update is required, they charge 0.25 Bitcoin. If you want a new trading pair added, it costs another quarter of a Bitcoin. Thats despite the widespread use of modern technologies that make these services a five-minute job.

Pierce says he does see the industry changing over time, and his outlook for the future remains optimistic. But in the meantime, he says centralized exchanges will continue to reign as the banks of the crypto world.

I want to see everybody have a chance at succeeding and for ground-breaking technologies to run wild. Instead, centralised exchanges have become the new banks of the crypto world, and are just as greedy and corrupt. If youre not partnered up at the top 1% with them, its going to be a very long journey for your project.

Disclaimer: The opinions in this article do not represent investment or trading advice from CCN.com.

This article was edited by Josiah Wilmoth.

Last modified: January 22, 2020 2:53 PM UTC

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The Dark Side of Becoming the Next Bitcoin - CCN.com

Bitcoin (BTC) has shed 6% in a week thanks mainly to Chinese New Year and uncertainty over coronavirus, commentators are suggesting.

Analyzing Bitcoin price data along with Chinese stocks performance on Jan. 24, social media resource Light said a slump in performance had spread to cryptocurrency.

Cryptocurrency market daily overview. Source: Coin360

Over the past several days, it notes, Bitcoin has in fact broadly correlated with stocks. Such behavior is reminiscent of what many perceived as a reaction to another global event the Iran crisis earlier this month.

China coronavirus-driven risk-off blanketing Chinese equities and Bitcoin. Iran correlation, now Chinese equities, Light commented.

The analysis summarized:

If there was ever a statement to the effect, Bitcoin has now made it to the global stage.

Bitcoin vs. Chinese equities. Source: Light/ Twitter

Coronavirus continues to spread beyond China, despite authorities attempts to contain it by imposing travel bans and boosting healthcare provision.

BTC/USD has lost just over 6% in the past seven days and at press time trading at $8,300. The virus factor comes at a sensitive time historically, data reveals, with Chinese New Year traditionally creating sell pressure for Bitcoin.

Compiled by trader and analyst Alex Krueger, figures circulating on Twitter show that in the run-up to the celebrations, Bitcoin returns often turn out negative.

In 2019, they averaged around -0.2% losses for the week prior, but Krueger himself appeared unperturbed by the results.

Nothing special, he summarized on Jan. 22.

As Cointelegraph reported, critics have protested against the theory that Bitcoin price action is directly influenced by geopolitical or other world events.

Nonetheless, issues involving China tend to impact the market conspicuously, against the backdrop of a blanket crypto trading ban imposed by Beijing in 2017. The country still accounts for the majority of Bitcoin mining activity.

Read more here:
Nothing Special Bitcoin Slumps 6% on Coronavirus, Chinese New Year - Cointelegraph

DAVOS, Switzerland Most Middle Eastern elites at the World Economic Forum are highly skeptical of bitcoin, but there are whispers about its potential for cross-border settlements in the energy sector.

According to Egyptian businessman M. Shafik Gabr, chairman of the ARTOC Group for Investment & Development, some Middle Eastern nations are already exploring the possibility of settling oil contracts in bitcoin. But he declined to specify which, and most of the leaders gathered in Davos for the annual conference that wrapped up Friday are adamant they see bitcoins post-sovereign nature as anathema.

Fellow Egyptian investor Ahmed Heikal, CEO of Qalaa Holdings, said hes not bullish on bitcoin because it doesnt have the legal framework for such wholesale deals. If nations or energy enterprises are to use bitcoin, he argued, it wont be for at least another decade.

Delegates from Oman to the United Arab Emirates and Saudi Arabia all expressed similarly dismissive views about bitcoin as an asset, often referring to it as a gambling conduit. But when asked if it could still be used to settle oil contracts especially considering the United States aggressive economic pressure on energy exporters Iran and Iraq one Omani politician, who did not want to be identified, teased, It depends on who's asking.

U.S. sanctions are top-of-mind across the region, as when President Donald Trump urged Europe not to trade with unfriendly energy suppliers. Iraqi President Barham Salih pushed back with a speech on Wednesday that asserted it was Iraqs sovereign right to have relations with neighbors on its own terms.

Saudi Arabian businessman Hamza Alkholi, CEO of Al-Kholi Group, dismissed the idea that bitcoin-denominated oil contracts could ever be more than an outlier.

Weve been trying for 30 years, he said, referencing efforts to move beyond the U.S. dollar by settling oil contracts in euros. Until bitcoin is regulated like the stock market, I dont see that happening.

Crescent Enterprises CEO Badr Jafar, who is heavily invested in the oil and gas industry, agreed theres no urgency among most players in his industry to move away from the dollar. Leaders and businessmen still dont trust cryptocurrency, Jafar said, and he expects central banks would push back if bitcoin gained more significant usage.

However, if oil contracts were to be settled in currencies beyond the dollar, Jafar said that might be driven by political factors related to Russia and China.

And soon there will be a digital currency issuer eager to help dollar-weary energy suppliers find alternative settlement systems. Equally concerned about trust, China is hyper-focused on both compliance and global market opportunities.

China's new Silk Road?

Chinese businesspeople see Eurasian crypto ventures as a stepping stone toward addressing more complex commodities markets.

China Blockchain Delegation Chairman Danny Deng said Chinas blockchain-based currency, which he expects the Peoples Bank of China (PBoC) to launch on a limited scale in 2020, could offer a backbone for energy markets.

Bitcoin has a larger and larger ecosystem, but it still cant afford the trading volume of such a commodity, Deng said. The traders of oil and gas are using leverage. That leverage must be backed by financial systems. Regions, like Iran may use bitcoin or other payment systems. But other countries that dont have this problem may play an important role in national [cryptocurrency] settlements.

From his perspective, fiat currency has become too political, rather than a strictly commercial tool. One of Chinas most revered bitcoiners, Wang Wei, a leader of nearly a dozen associations from the Shanghai Stock Exchange Corporate Governance Advisory Committee to the China Mergers and Acquisitions Association, said bitcoin lost its chance to be the dominant currency for settlements and will instead primarily be a store of value.

Several Chinese businessmen who work with the government and PBoC agreed the bank could offer an alternative to dollar settlement systems by 2021. For example, Zhang Shousong, secretary general of the China Blockchain Application Center, said by the next Davos conference PBoCs digital currency will be operational not only in China, but all over the globe.

Given the tenor of public officials statements, Deng said cryptocurrency rails are on a fast track. Shousong added its not like Libra, its certainly going to launch, referring to the Facebook-initiated global currency project whose debut remains uncertain.

In the meantime, Wei has taken Chinese-speaking Kazakhstani entrepreneur Tilektes Adambekov under his wing and helped the latter establish the licensed EBX crypto exchange in Kazakhstan, the worlds 10th-largest oil exporter. Adambekov joined the Chinese delegation for lunch in Davos to discuss the future of global markets over foie gras and fig chutney in a mountaintop restaurant with a panoramic view. Adambekov quoted Mao Zedong in a thank you speech to the delegation, which prompted resounding applause.

From the delegations perspective, Adambekov is a perfect fit for Chinas aspirations. He spent eight years working in China before returning home to focus on serving Russian-speaking crypto markets across borders. Plus, Kazakhstan has an open regulatory framework and is strategically situated along the path of Chinas Belt and Road initiative. Adambekov said his exchange aims to support tokenized oil and gas options, settled in national cryptocurrencies yet offering bitcoin liquidity.

From China to Oman, all businesspeople and diplomats agreed the dollar will remain king in commodities markets for the near future. But alternative options may already be on the horizon.

When asked if such options could usurp the greenback by 2025, Matthew Blake, the World Economic Forum's monetary systems lead, said the dollars role is so pronounced that to displace it in a meaningful way would take longer than four years.

Bitcoin may, or may not, participate in that shift.

Bitcoin has demonstrated some of the qualities that a distributed currency can possess, Blake said. Its also had challenges too. The role of a currency is to have a store-of-value with an inherent level of stability. There needs to be liquidity. In the case of bitcoin, it hasnt had those qualities thus far.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Notes From the WEF: Oil-Producing Nations Want Dollar Alternatives, Just Not Bitcoin - Coindesk

The New Year has only just got underway, but 2020 is already proving to be a roller-coaster for investors in Bitcoin SV.

The Bitcoin Cash rival has experienced some incredible price surges over the past couple of weeks, making it one of the best-performing coins of the year so far.

But why has Bitcoin SV been pumping so much? Lets take a look at what can influence a BSV price surge.

Bitcoin SV the story so far

Bitcoin SV was created out of the hard fork of Bitcoin Cash on November 15 2018.

Led by Craig Wright, who famously claims to be Bitcoin founder Satoshi Nakamoto, the split aimed to restore the proposed original vision of the Bitcoin protocol.

Since the fork, Bitcoin SV has proved popular among investors, and it currently ranks as the fifth-largest coin on CoinMarketCap.

Other than a small rally last summer, 2019 proved to be a fairly tepid year for the Bitcoin SV price. It started 2019 valued at $92 and finished just $5 higher at $97.

Things couldnt be more different in 2020. Bitcoin SV has pumped 300% since the start of the year, hitting highs of $372 and briefly overtaking Bitcoin Cash as the fourth-largest crypto coin by market cap.

There is a lot of speculation about what has influenced the recent surges in the Bitcoin SV price, with the most common theory surrounding Craig Wrights recent lawsuit with the Dave Kleiman estate.

The lawsuit against Craig Wright

Developments in a long-running legal case against Wright have seen the Bitcoin SV price experiencing massive gains as well as losses.

The lawsuit was initiated by Ira Kleiman, the brother of Wrights former and now deceased partner David Kleiman with whom Wright claims to have developed the early Bitcoin protocol.

Ira Kleiman sued Wright on the grounds that the estate should be entitled to half of the Bitcoins Dave Kleiman and Wright mined together which would be worth billions of dollars today.

Wright said he was unable to access the Bitcoins because they had been moved to a blind trust, and that a bonded courier would deliver the keys to the funds.

On January 14 when the Bitcoin SV price hit its all-time high various sources suggested that Wright had managed to get details of the accounts containing the Bitcoin fortune.

However, he has so far only produced the encryption key which unlocks a list of total Bitcoin holdings and has not provided the private keys necessary to access the funds themselves. As such, the FOMO eventually wore off and the Bitcoin SV price dropped back down.

As a result, the pressure is still on Wright to deliver the final private keys, which he claims will arrive before February 3.

More volatility on the horizon?

Whatever the reasons for the Bitcoin SV price surges, it looks like investors should brace themselves for more volatility over the coming months.

Bitcoin SVs Genesis hard fork, due to take place at the beginning of February, could result in volatility around the event.

Meanwhile, the Kleiman vs Wright case is yet to be resolvedand is due to go to trial shortly, so investors should expect further ups and downs in the Bitcoin SV price as it develops.

Read more from the original source:
What influenced the Bitcoin SV price surge? - Coin Rivet

For the last five years running, the price of Bitcoin has fluctuated drastically in January.

Historically, the wild price action seen in January often makes it the worst month for Bitcoin performance; for the last five years, Bitcoin has experienced a dump of between 15% and 50% beginning in early to mid-January, which often sends Bitcoin down to its lowest value of the year.

Although there have been several explanations postulated for why this dump occurs so consistently around this time, one of the most persistent argues that the dump is caused by Chinese New Year.

The exact date of Chinese New Year changes each year since it is based on the Lunar Calendar, rather than the Gregorian calendar used in most of the world. In 2020, the Year of the Rat, Chinese New Year falls on January 25 and ends on January 27.

As for exactly how Chinese New Year directly influences the price of Bitcoin, there are several plausible theories. The first suggests that responsibility lies with the tradition of Hngbo, which roughly translates to "red package." Every year, millions of red envelopes containing cash are given out as gifts, typically in whole numbers that are multiples of 50 or 100.

As such, it isn't unrealistic to think that Chinese Bitcoin investors could dip into their BTC reserves to fund their Hngbo packets. Since the New Year is celebrated by an estimated 2 billion ethnic Chinese worldwide, this could lead to a significant amount of BTC being exchanged back to cash via P2P and OTC markets in the days and weeks surrounding Chinese New Year. Such a sustained sell-off could be sufficient to change the dynamics of supply and demand such that supply outstrips demand, causing Bitcoin prices to tumble as exchange volume drops.

According to statistical analysis performed by blockchain enthusiast Phoon Mei Hui, there is some evidence to suggest this may be the case, since there is a strong correlation between negative price action and volume changes in the days leading up to Chinese New Year. Likewise, older analysis performed by Percy Venegas, Chief Scientist at EconomyMonitor, found that there is a significant uptick in WeChat, QQ, CoinCola and BitcoinWorld activity in the days and weeks before Chinese New Year. Since these apps are commonly used from Bitcoin off ramping, an increase in activity could indicate increased selling activity.

BitMEX CEO Arthur Haynes appears to agree, tweeting, "The year of the rat starts this weekend. Time for #Bitcoin volatility and volumes to nose dive."

Others, however, simply believe that Chinese New Year is a red herring, and that the frequent January dump in Bitcoin's price is an example of a self-fulfilling prophecy. Since Bitcoin has dumped for the last five years in a row, traders looking for trends in the market might be tempted to believe this year will be no different, leading to an early sell-off in order to protect against further losses. However, this sell-off could actually be the cause of a broader dump that sends Bitcoin prices tumbling.

Whatever the case, trader and economist Alex Krger believes that Bitcoin is also going through the motions this year, telling Decrypt that, "Data appear consistent with normal performance during/after the CNY," referring to the below chart showing the average price change prior to Chinese New Year at various time scales.

On the other hand, CoinGecko Co-founder Bobby Ong believes that this year's relatively muted activity in the run up to Chinese New Year can be attributed to the recent coronavirus scare in Wuhan, China.

"It's been observed that Bitcoin make movements on the run up towards Chinese New Year. One may argue that Bitcoin moves up towards the Chinese New Year period as Chinese traders created a feel good feeling before taking profit and closing off the accounts for a week for the festivities," said Bobby, "That being said, celebrations are muted this year as China is currently battling the coronavirus in Wuhan and many people are scared of the effect of this fast-spreading virus."

This uncertainty hasn't stopped several platforms taking the interest surrounding the relationship between Chinese New Year and Bitcoin price action and running with it. For example, cryptocurrency derivatives exchange BTSE is currently taking predictions on how much BTC will be worth almost two weeks after Chinese New Year for a Tether (USDT) prize.

Will the trend continue in 2020? We'll soon find out.

Visit link:
Does the Chinese New Year really affect Bitcoins price? - Decrypt

Theres no denying that Bitcoin is at a critical junction, either ready to fall deeper into a downtrend or explode into a new bull rally driven by pre-halving hype and speculation.

Losing momentum here, according to one crypto analyst, would almost certainly lead to an Elliot Wave Theory C-wave that would take the cryptocurrency further down toward $1,000 a move that would surely leave the crypto market in shock and awe.

Bitcoin price recently spiked from local downtrend lows of around $6,400 toward a high of over $9,200 before a rejection at overhead resistance stopped the rally in its tracks.

Although the bullish momentum was strong, causing Bitcoin to gain over 40% in 30 days, that momentum has since been waning after the rejection occurred, as traders begin to fear that the breakout wasnt enough to sustain positive price action into a new uptrend.

If Bitcoin loses further momentum here, it could be devastating for the cryptocurrency market.

A failure to maintain momentum, according to one crypto analyst, would likely result in an Elliott Wave Theory C-wave driving the price of the first-ever cryptocurrency down to just $1,000.

Related Reading | Psychology of a Market Cycle: Are Bitcoin Investors In Denial?

However, such a move would first require that Bitcoin falls through the 100-week moving average, which is currently sitting at roughly $7,200. The leading cryptocurrency by market cap losing that level would almost certainly cause a retest of the 200-week moving average.

The 200-week moving average is what caught Bitcoin at its current $3,100 bottom in late 2018, and held it as support, igniting a new rally in 2019.

This analyst speculates that Bitcoin wouldnt hold in another test, and it would send the price per BTC tumbling down towards $1,000.

According to Elliott Wave Theory, impulse waves move in the primary trend direction with 5 waves, then a three-wave corrective ABC pattern follows. In this scenario, the A-wave target would have been $3,100, and B-wave would be the top in late June at $14,000.

In ABC corrections, the C-wave is always lower than the A-wave, suggesting that such a move would put a new lower bottom in, potentially at $1,000 the previous bull market top before Bitcoin reached $20,000.

Related Reading | Elliott Wave Theory Suggests Bitcoin May Be Due For Biggest Correction Yet

A fall to $1,000 would cause extreme shock and awe across the crypto industry, and could even cause many crypto companies to go bankrupt or fold as a result. Some analysts claim that this is all necessary for Bitcoin to experience another bull market that it first requires the investors of the previous cycle to be entirely flushed out, much like what occurred during the dot com bubble.

However, if Bitcoin holds here, and momentum maintains, the crypto asset could go on a new bull run leading into the assets upcoming halving.

Link:
Shock & Awe: Bitcoin Losing Momentum Could Result in Elliot Wave Correction to $1,000 - newsBTC

Ray Dalio, multi-billionaire and founder of investment firm Bridgewater Associates, said investors should not miss out on traditional markets, CNBC reported on Jan. 21.

Dalio warned from holding Bitcoin, saying that its neither a medium of exchange nor a store of value.

Dalio was interviewed at the World Economic Forum in Davos, Switzerland, where he advised investors to hold a global and diversified portfolio in this market, while increasing their stake in stock markets.

While Dalio acknowledged recession concerns, he argued that cash is trash due to the governments ability to print it at will something he believes they will be forced to do during a market downturn. Due to this, jumping into cash just before the eventual market fall is ill-advised, according to Dalio.

The billionaire still cautions balance, advising investors to hold a certain amount of gold in their portfolios.

His stance on Bitcoin (BTC) was far more negative, however, noting that it is not currently functioning as money:

Theres two purposes of money, a medium of exchange and a store hold of wealth, and Bitcoin is not effective in either of those cases now.

He added that the volatility of Bitcoin makes it unattractive for serious investment, while something like Libra could be a better option. Elaborating on his preference of gold as a store of value, he noted that central banks are some of the largest metal holders:

What are they going to hold as reserves? What has been tried and true? Are they going to hold Bitcoin digital cash Theyre going to hold gold. That is a reserve currency.

Bitcoin is often touted as digital gold, a reserve asset independent from government control.

But while many believe in the store of value thesis of Bitcoin, its performance so far has not indicated meaningful correlation with global markets. While it does appear to have slightly positive correlation to gold, the indexes are small enough that they can be attributed to coincidence.

These may still be teething problems due to the relative novelty of cryptocurrencies. As noted by Duke University professor Campbell Harvey, the sample size is still too small. Over thousands of years of history, even gold was not always a reliable safe-haven asset.

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Ray Dalio Calls for Investment Diversification, But Not in Bitcoin - Cointelegraph

As tensions mount between the United States Trump administration and the Iran regime, the rogue state has been working on a strategy to outwit the US President and get around his economic sanctions and political pressure and it all relies heavily on Bitcoin and cryptocurrencies.

While World War III may have thus far been averted, the tensions between the United States and Iran continue to increase and come to a boiling point.

Earlier this month, the US Trump administration completed a drone missile strike that claimed the life of Iranian General Qasem Soleimani.

Related Reading | FinCEN Issues Advisory On Irans Illicit Use of Crypto to Bypass Sanctions

In retaliation, Irans Islamic Revolutionary Guard Corps launched ballistic missile attacks at the Ayn al-Asad airbase in Iraq, killing American citizens.While Trump said the damage done was minimal, as many as 80 deaths were recorded of US citizens.

But the attacks are just the latest in an ongoing saga between the United States and Iran, dating back decades.

Even President George W. Bush had dubbed Iran as one of the three countries in the axis of evil nearly twenty years ago, and the turmoil dates back much further than that.

Among the ways that the United States Trump Administration applies pressure to these rogue states, is by enforcing economic sanctions.

According to data, the strategy has been working and has diminished the Iranian economy by as much as 10 to 20 percent.

However, Iran has recently discovered one simple trick to outwit President Donald Trump and the rest of the United States government officials: evading sanctions with Bitcoin and cryptocurrencies.

Interviews with anonymous Iranian citizens claim that Bitcoin is the only way to move money out of the country, so its becoming more popular within the country.

This could be the reason why following the attacks on Iran, Bitcoin rallied and Iranians began paying as much as a 3x premium just to buy Bitcoin from website LocalBitcoins.

But its not just Iranian citizens relying on Bitcoin and crypto. Two Iranian individuals have had their Bitcoin addresses added to the Specially Designated Nationals List kept up to date by the US Treasury Departments Office of Foreign Assets Control.

And Iran is said to have been planning a digital version of the countrys native fiat currency, the rial, specifically to evade Trump-imposed economic sanctions.

While this hasnt yet happened, the situation in Iran, North Koreas increasing interest in crypto, and even the implications of Facebooks Libra have caused the Trump administration and the US Treasury office to look closer at cryptocurrencies and their illicit use.

Related Reading | Trump Tweet Timing Coincides With Bitcoin Breakdowns

Trump even tweeted about his distaste towards Bitcoin and crypto in early July, just as the 2019 parabolic rally topped out.

Trump is only bound to dislike Bitcoin even more if Iran is able to continue to use Bitcoin and other cryptocurrencies to skate around his sanctions and continue to make a mockery of the President.

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Iran Thinks It Can Outwit Trump. The Key? Bitcoin - newsBTC

On January 3, 2020, a small group of crypto enthusiasts celebrated the second annual Proof-of-Keys day with hopes to get people to withdraw funds from centralized digital currency exchanges. However, exchanges holding massive amounts of BTC only saw their reserves grow larger and data shows that Coinbase now holds 1 million BTC ($8.4 billion). Crypto users are still keeping large sums of digital asset holdings on trading platforms despite the fact that 2019 saw the most exchange hacks in one year over the last decade.

Also read: The Fallout From Onecoins Ponzi Scheme Continues to Impact Investors

2019 saw a significant amount of trading platform hacks and exchange losses according to a recent report authored by the blockchain surveillance firm Chainalysis. The company noted that even though there were more attacks there was less money stolen. However, Chainalysis highlighted that malicious hackers are becoming smarter. 2019 saw more cryptocurrency hacks than any other year, the report underlined. But of the 11 attacks that occurred this year, none of them came close to matching the scale of major heists such as [2018]s $534 million Coincheck hack. Last year digital currency exchanges lost approximately $283 million worth of cryptocurrency due to breaches and malicious hackers.

About a month before the second annual Proof-of-Keys day initiated by Trace Mayer, news.Bitcoin.com reported on the vast number of coins centralized exchanges held in reserve. The list was provided by Bituniverse using the firms Exchange Transparent Balance Rank (ETBR). The ETBR list had shown that Coinbase held roughly 966,000 BTC during the first week of December 2019. Today, the ETBR report from Bituniverse shows the San Francisco-based exchange now has 1.03 million BTC ($8.5 billion) held in reserves. The data from Bituniverse stems from onchain exchange balances recorded by Etherscan and Peckshield.

Additionally, the numbers from Bituniverse can also be cross-referenced with data from Chain.infos crypto exchange reserve list. Chain.infos data is slightly different, showing that Coinbase holds 983,000 BTC but most of the data is fairly consistent with the findings from the Bituniverse application. Figures indicate that Huobi is the second-largest cryptocurrency exchange by reserve count with 462,000 BTC ($3.8 billion), 1.8 million ETH, and a large number of USDT as well. Binance has around 307,000 BTC ($2.5 billion) as of Saturday and 2.6 million ETH held in reserves as well. Then theres Bitfinex (290,000 BTC or $2.8 billion), Bitmex (274,000 BTC or $2.28 billion), Bitstamp (242,000 BTC or $2 billion), Okex (211,000 BTC or $1.83 billion), Kraken (173,000 BTC or $1.8 billion), Bittrex (125,000 BTC or $1.2 billion), and Gemini (95,000 BTC or $922 million).

Other exchanges with a vast amount of digital assets held in reserves include Bitflyer, Gate.io, Poloniex, and Hitbtc. Bituniverse and Chain.infos data shows that overall the centralized exchanges accumulated more reserves since the first week of December. Not only are a few crypto advocates afraid that large exchanges could be compromised for billions in digital assets by hackers, but theres also the fear of fractionally reserving bitcoins.

There have been many articles and academic papers discussing the subject of proof-of-reserves when it comes to cryptocurrencies. Researchers from Stanford University published a report in 2015 called Provisions which tackles the subject of exchanges and reserve transparency. The Stanford researchers explained that proof-of-solvency demonstrates that the exchange controls sufficient reserves to settle each customers account. The paper introduces a privacy-preserving proof-of-solvency. Whereby an exchange does not have to disclose its Bitcoin addresses, the 33-page long academic paper notes.

During the last few months, platforms like Bituniverse and Chain.info have published reserve lists based on data provided by independent parties like Peckshield. Exchanges shown on these lists have neither confirmed or denied the bitcoin reserve data is legitimate. A number of community members within the cryptosphere believe trading platforms should provide their own reserve numbers so they can exemplify transparency themselves. Meanwhile, even though a lot of crypto influencers and proponents tell people regularly to store cryptos in a noncustodial fashion, the great majority of digital asset owners continue to store them on centralized trading platforms.

What do you think about the billions worth of BTC held on centralized digital currency exchanges? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bituniverse App, Stanford, Chainalysis, Chain.info, Wiki Commons, Fair Use, and Pixabay.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

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Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges - Bitcoin News