Cryptocurrency : 1 in 5 bitcoins on exchanges is held by Binance

Key facts:

Faced with greater regulations, users would be moving from Chinese exchanges to Binance.

Bitcoins held by Binance represent 3% of the total coins in circulation.

Binance’s growth among bitcoin (BTC) exchanges and other cryptocurrencies has been unstoppable. Currently, the exchange house has more than 20% of the total BTC of the exchanges in its reserve and far exceeds the rest of the platforms in the ecosystem.

According to data from the most recent Coin Metrics report, Binance has more than 570,000 bitcoins in its reserves, a new all-time high and “much more than any other exchange” known to the analytics firm.

The amount stored in Binance wallets equates to almost 23% of the BTC in reserves of all exchanges, according to CryptoQuant. According to the graph of this company, in total, the exchange houses accumulate more than 2.48 million BTC, with data updated to June 14.

This increase in the holding of bitcoins on Binance contrasts with the general decrease in the coins held on exchanges. Between May and the beginning of June, the combined reserves of the exchange sites did not fall below 2.5 million BTC.

Among all the exchanges, there would be about 2.48 million bitcoins. Source: CryptoQuant.

As reported by CriptoNoticias, at the end of March this year a minimum was reached in the balance sheets of exchanges, with 2.4 million BTC in their coffers. At that level, exchanges had decreased their BTC holdings by as much as 20% from the all-time peak of nearly 3 million BTC, recorded a year earlier.

Putting the rise of Binance in context, a year ago the exchange had 1.49% of BTC in circulation, as recorded in Glassnode records. As of today, the 570,000 BTC held by the exchange represent 3% of the total BTC mined.

A year ago, Binance had 1.49% of the BTC in circulation. Source: Glassnode.

China, a possible driver of the increase

For analysts at Coin Metrics, the increase in bitcoins held by Binance could have one of its reasons in China. The report attributes this situation, at least partially, to the campaign that the government of the Asian giant has sustained in recent weeks. against miners and other actors involved in the world of Bitcoin.

Although there are many factors at play, the increase is likely due, at least in part, to investors moving their BTC from Chinese exchanges to Binance, which is not officially based in mainland China.

Coin Metrics.

More than 570,000 bitcoins are on Binance. Source: Coin Metrics.

While this could be one of the reasons in the short term, the sustained growth of Binance holding over time shows that the exchange has been gaining a spot in the freehand market.

As a product, Binance offers all kinds of options for its users, they can operate from the traditional spot trading to the futures market, through peer-to-peer trading (P2P) and even NFT collectibles (non-fungible tokens), with both platforms launched this week, as we report in this newspaper.

Bitcoins come out of China … and so do miners

On the other hand, we can highlight the role that China has played in the decrease of the hash rate (the processing power accumulated by miners in the Bitcoin network) in recent weeks.

In the midst of a growing persecution of miners, with the closure of farms in up to 5 provinces of the Asian country, the network has fallen to levels of a year ago, in terms of hash rates. This Wednesday, June 23, BitInfoCharts shows a power rate of 95 EH / s, more than 40% below the high of 170 EH / s reached in mid-May.

Various reports indicate a massive migration of equipment for Bitcoin mining, which would be leaving China for North America, some regions of Europe and even Kazakhstan.

China has historically been recognized as the place where the greatest mining power of Bitcoin is concentrated in the world. That is why the current situation represents a challenge and, in the eyes of some analysts, an opportunity to increase decentralization in the network.

Coin Metrics highlights that despite the negative outlook for miners, they are not selling their bitcoins in droves. “After peaking on May 19, the amount of BTC transferred by miners has been declining,” the researchers note.

Miners are selling less BTC than in previous weeks. Source: Coin Metrics.

As we have previously reported, bitcoin flows from mining seem to indicate that players in this industry are betting on further increases in the price of bitcoin, instead of selling their BTC to cover operating expenses and moving their farms.

It is likely that a part of the miners also sold part of their BTC, causing an increase in the amount of BTC sent by the miners. But despite subsequent news of increased regulation, there has been no other spike in transfers from miners.

Coin Metrics.

Bitcoin shows some signs of weakness in the market, having fallen as much as 50% below the all-time high of 64,000 it set in mid-April. However, various analysts suggest that there are still new highs for the end of the year, claiming that the end of this upward cycle has not yet come.

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