A crypto analyst claims that Bitcoin (BTC) held or staked on exchanges has been sold. Binance answers questions on the topic…
Rufas Kamau thinks exchanges are selling Bitcoin
Security breaches and attacks often highlight the risks of storing Bitcoin (BTC) on centralized exchanges. One analyst even claims that keeping your BTC on exchanges is also a factor for price drops. Rufas Kamau, research and market analyst at Scope Markets Kenya, shared his thoughts on how holding BTC on an exchange lowers its price. Kamau believes that buying BTC on exchanges simply means buying “I Owe You” (IOU), which he describes as “paper Bitcoin”.
The analyst also noted that exchanges like to withdraw BTC, such as high withdrawal fees. He points out that he has created many ways to deter. On the other hand, exchanges encourage BTC to stay on exchanges by offering staking services. According to Kamau, this is done because exchanges can sell Bitcoin held on exchanges to other buyers, while the owner of the Bitcoin IOU is happy to get an annual percentage return on their BTC.
“Stay away from exchanges”
Due to this process, Kamau argues that investors who buy and hold BTC experience a deficit as the process allows exchanges to “print” Bitcoin and the price drops as supply increases. is doing. It also urges users to stay away from exchanges:
The sensible thing to do if you want to change the world with Bitcoin.
Although many people liked and retweeted Kamau’s post on Twitter, not everyone agreed with his comments. Twitter user Koning_Marc responded to Kamau by saying his message was “wild speculation at best.” Additionally, Twitter user Felipe Encinas replied that in this case, exchanges can short sell without owning BTC. Encinas said “it can’t be”.
Crypto exchanges do not deny that this can happen on some exchanges
However, LBank President Eric He said that a lesson will be given to exchanges that make this practice:
The market is to exchanges that sell users’ Bitcoin will teach a lesson because they won’t be able to get back the Bitcoin they sold. Exchanges like this will definitely fail.
He also explained that the currently thriving and expanding cryptocurrency exchanges are “solid crypto believers.” Those who believe that BTC can hit $100,000 and therefore buy BTC instead of doing dark things like selling other people’s Bitcoins.
Binance focused on the issue. A Binance spokesperson said in a statement that exchanges are not authorized to move users’ funds without permission. They said they did not take positions at their companies and that “users’ crypto assets are securely stored and stored in offline, cold storages held on the exchange.”
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