Cryptoverse; Bitcoin investors take control


Bitcoin Investors Take Control; Jan. 24 (Reuters) – Paranoid? The dominoes of FTX and other crypto custodians are enough to make even the most insecure investor grab their bitcoins and stuff them under the mattress.

In effect, owners large and small are “owning” their funds and moving them from crypto exchanges and trading platforms to personal digital wallets.

In a sign of the shift among retail investors, the number of bitcoins in smaller wallets — those holding less than 10 bitcoins — rose to 3.35 million on Day 11, according to CoinMetrics.

As a percentage of the total bitcoin supply, wallet addresses with less than 10 bitcoins hold 17.4%, up from 14.4% a year ago.

“A lot of it depends on how often we trade,” said Joshua Peck, founder of hedge fund TrueCode Capital. “If you’re just going to buy and own for the next 10 years, it’s probably worth investing and learning how to keep your property really well.”

Bitcoin Investors Take Control; The follow-up was weighed down by the FTX scandal and other cryptocrashes, with large investors leading the way.

According to data from Chainalysis, the 7-day average daily flow of funds from centralized exchanges to personal wallets reached a six-month high of $1.3 billion in mid-November, around the time of the FTX crash.

According to the data, large investors with transfers above $100,000 are responsible for this flow.


Not your keys, not your coins.

This mantra among nascent crypto enthusiasts, warning that access to funds is paramount, was regularly trending online last year as financial platforms dropped like flies.

Autonomy is still no walk in the park.

Wallets can range from “hot” connected to the Internet to “cold” offline hardware devices, although the latter usually does not appeal to novice investors who often buy crypto on major exchanges.

Multi-level security can often be a difficult and expensive process for a small investor, and it is always a challenge to keep the encryption key – a string of data similar to a password – without losing or forgetting it.

Meanwhile, hardware wallets can fail or get stolen.

“It’s very challenging because you have to keep track of your keys and you have to back up your keys,” said TrueCode Capital’s Peck, adding, “I will say that it’s very challenging to take care of yourself. a lot of people. -A million dollar crypto collection. “

Institutional Investors are also turning to regulated custodians—specialized firms that can store funds in cold storage—because many traditional financial firms would not be legally able to “self-manage” investors’ assets.

One such company, BitGo, which provides escrow services for institutional investors and traders, said it saw a 25% increase in initial inquiries in December compared to the previous month from people looking to move money from exchanges, and a 20% increase in growth. in custody assets.

David Wells, CEO of Enclave Markets, said trading platforms are extremely cautious about the risks of keeping investors’ assets with third parties.

“One comment that stuck with me was, ‘Investors forgive us for losing some of their money with our trading methods because that’s what they sign up for, what they don’t forgive is that we’re poor custodians.’

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