Cryptocurrency institutional investors overwhelmingly keep their wealth on exchanges, instead of the inherent security risks, as new data claims.
The wise #investor extracts their #Crypto onto a hardware wallet like Trezor. 🧐 #bitcoin #BTC #blockchain #investments#investing #economics #EconTwitter #fintech #Chainlink #cryptocurrency #CryptoNews #SundayThoughts https://t.co/XS0yvZbo1N — Robby Hollins (@RobertHollinsKY) November 24, 2019
On November 22, it has been compiled by Binance, the cryptocurrency exchange, that a survey asked 76 institutional investors who used its platform about their trading habits.
However, the survey was part of Binance’s Institutional Market Insights research, which is now in its second edition.
Not Your Keys: 92% of Institutional Investors Keep Crypto on Exchanges #Cryptocurrency institutional investors overwhelmingly keep their wealth on exchanges despite the inherent security risks, new data claims.… https://t.co/NEvdjXXRfK — Bitcoin INFO (@BitcoINstagram) November 24, 2019
It has been analyzed that among the most surprising results was that 92% of participants chose to keep their crypto — Bitcoin (BTC), stablecoins and others with trusted third parties, and not under their own control.
The figure overlooks much safer alternatives such as hardware wallets and other cold wallets.
Likewise, Binance summarized:
“Exchanges remain as the most popular choice for crypto asset storage amongst our institutional and VIP clients at 92.1%.”
“When moving to self-storage, cold wallets are the second most favored choice, given their improved safety and control. Third-party custody services were the least popular option at 2.6%.”
The 76 investors cannot be said to have significant exposure in terms of capital, over 50% had total crypto holdings of under 10 units of a coin. 10 BTC currently equals around $72,000.
As it has been reported, investors face significantly increased risk of loss and theft of coins if they remain in wallets to which they do not control the private keys.
However, exchanges, including Binance, continue to see hacks this year, while regulatory scrutiny can also see funds locked up without notice until an account owner provides personal identity data.
Efforts to make investors aware of the need to control their money are mounting. On January 3, 2020, the second annual Proof of Keys event will challenge all Bitcoin holders to remove their funds from third-party wallets.