8 exchanges hold more than 1.95 million BTC, direct calls from investors are too dangerous

Eight major bitcoin exchanges hold more than 1.95 million bitcoins ($ 14.1 billion), and cryptocurrency investor and entrepreneur Trace Mayer highlights the dangers of this massive hoarding.

As can be seen from the above figure, Coinbase holds 966,230 bitcoins and BitMEX holds 265,140 BTC. The number of bitcoins held by these two exchanges alone exceeds 60% of the total exchange holdings.

Mayer tweeted that the large amount of bitcoin held by bitcoin exchanges is dangerous for the industry. Mayer even believes that these bitcoins "like many other things just wait to be lost."

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Of course, he was referring to hacking of the Bitcoin trading system and other events that caused Bitcoin to be lost forever. In 2019 alone, many well-known Bitcoin exchanges in Canada, New Zealand and South Korea closed.

Not all exchange closures are due to cybercrime activities. Take QuadrigaCX in Canada as an example. After the death of the company's CEO Gerald Cotten, his "cold wallet" became inaccessible.

If major security breaches occur in these large bitcoin exchanges, billions of dollars of bitcoin could be lost forever. Such a huge Bitcoin reserve may also provide unnecessary motivation for password hackers.

In early 2019, blockchain intelligence company CipherTrace warned that perpetrators inside cryptocurrency exchanges are becoming a pressing issue for the security of cryptocurrency transactions. Investigators reportedly suspected that some of the hacks in 2019, including the theft of Cryptopia and Bithumb, were done by insiders.

For Mayer, who advocates "no private key, no bitcoin," the danger posed by exchanges holding large amounts of bitcoin is another reason why he called on hodler to master private keys.

This cryptocurrency investor once opposed users placing their Bitcoins in third-party wallets like exchanges. In 2018, Mayer launched the Proof of Keys event to celebrate the birth of the Bitcoin genesis block.

The campaign called on Bitcoin owners to withdraw Bitcoins they hold from exchanges and transfer them to wallets where they can hold private keys. Mayer said that Proof of Keys is also an important step to recover currency sovereignty.

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