The amount of Bitcoin held by Coinbase in cold storage has actually decreased since the end of last year. In December 2019, it was reported that Coinbase was holding 966,230 Bitcoin. Yet, Bitcoin’s price has grown significantly since then—up to its current value of $11,420. And as Bitcoin’s price continues to rise, Coinbase’s reserves grow more valuable by the day.
“It might be the world’s largest honeypot, a lot of people surely wish they had a quantum computer,” Elias Strehle, researcher at Blockchain Research Lab, told Decrypt.
A Bitcoin surrounded by several altcoins. Image: Shutterstock
Coinbase’s increased hold on Bitcoin could represent somewhat of a security risk for the crypto industry. Should Coinbase’s cold storage holdings ever be exploited, there would be a lot of Bitcoin at stake. However, the exchange does maintain strict security protocols and even tries to attack itself to check for any weaknesses.
Coinbase’s holdings have also potentially undermined the decentralization of the crypto industry.