BitMEX’s BTC ‘Insurance Fund’ Grew 63% in 2019

Share Article

BitMEX has expanded its ‘insurance fund’ substantially in 2019. Since the beginning of the year, its Bitcoin (BTC) holdings have grown by 63%.

Sponsored



Sponsored

Every exchange has some funds in storage as ‘insurance.’ However, this year we have seen such funds explode as exchanges continue to control more and more of Bitcoin’s supply.

Despite Declining Trading Volume, BitMEX’s BTC Fund Grows

Recent data shows that BitMEX continues to expand its BTC pile and seems to have no intention of slowing down its accumulation.

Sponsored



Sponsored

BitMEX alone has seen its ‘insurance fund’ of BTC grow by 62% in 2019. It can now be said that the exchange holds around 0.18% of all BTC. Given that a large portion of Bitcoin’s circulating supply is lost, the amount of BTC BitMEX effectively controls via its insurance fund is substantially higher than 0.18%.

BitMEX’s increasing insurance fund is strange considering that its trading volume has been drying up in 2019. The BTC volume on the exchange is now similar to what was seen during the height of the bear market in November 2018. Curiously, however, BitMEX’s insurance fund continues to grow even though there is less trading volume to ensure.

Exchanges Accumulate More and More Crypto-Assets

It has become increasingly clear that exchanges are hoarding more and more Bitcoin, a trend that really took off in 2019. Users are entrusting exchanges and centralized entities with their funds more than ever before, despite 2019 setting records for hacks.

BeInCrypto reported earlier this month that Coinbase has over $7B Bitcoin under its custody. Other exchanges, like BitMEX, Bitstamp, Bitfinex, and Kraken also hold sizeable amounts each totaling over $1B in value. Therefore, it’s clear that this is an industry-wide trend. What began as a push to decentralization has moved the responsibilities of managing crypto-assets to a small consortium of exchanges and entities.

Exchanges in 2019 now possess more influence and power over the market than ever before, even holding a large portion of BTC in circulation. How this will play out in 2020, and whether this will only get worse, remains to be seen.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Related topics

Raised in the U.S, Lucian graduated with a BA in economic history. An accomplished freelance journalist, he specializes in writing about the cryptocurrency space and the digital '4th industrial revolution' we find ourselves in.

Follow Author

Crypto predictions with the Best Telegram Signal with +70% accuracy!

Join now

Market signals, studies and analysis! Join our Telegram Today!

Go

Market signals, studies and analysis! Join our Telegram Today!

Go