Keeping bitcoins in exchanges reduces the price

One digital currency analyst claims that if investors keep their bitcoins in exchange offices, these exchanges can sell their bitcoins to someone else. In this case, as the supply of bitcoin increases, the price of this digital currency will decrease.

To Report Coin telegraphs, hacks and security vulnerabilities are among the dangers that threaten bitcoin holders in centralized exchanges. One analyst claims that keeping bitcoins in exchanges will reduce the price of this digital currency.

Rufas Kamau, a researcher and analyst at digital currencies at Scope Markets Kenya, explains how he thinks keeping bitcoins in exchanges will reduce the price of this digital currency. He believes that buying bitcoins in exchange offices is just a kind of purchase I owe you Or IOU. IOUs are informal documents that certify the debt of one person or group to another. Camao describes this type of bitcoin as “paper bitcoins”.

He said in this regard:

If you buy bitcoins from an exchange, you are essentially buying paper bitcoins; An IOU purchase from an exchange that settles it as soon as you decide to move your bitcoin out of the exchange. That is why the withdrawal fee from the exchange offices is very high.

Camao points out that money changers use many methods to prevent investors from withdrawing their bitcoins. High fees are one of these methods. Exchange offices, on the other hand, encourage investors to keep their bitcoins in exchange offices by providing services such as equity.

According to Camao, the reason for investors ‘encouragement is that exchange offices can sell traders’ bits to other buyers. On the other hand, the owners of paper bitcoins are also satisfied with receiving their annual return.

Because of this, Camao claims that investors who buy bitcoin and keep it in exchange offices suffer; This is because the process allows exchange offices to print more paper bitcoins, and as a result, as the supply of bitcoins increases, so does the price. For this reason, he has asked users to keep their assets away from exchange offices. He believes that if investors want to change the world with bitcoin, it is better to do so with their real bitcoin. [نه با بیت کوین کاغذی].

Although many have liked and retweeted Kamao’s remarks on Twitter, not everyone agrees.

A Twitter user nicknamed “Koning_Marc” responded to Camao that his remarks were, at best, “unrealistic speculation.” In addition, another Twitter user, Felipe Encinas, responded to his remarks. This user says that if such a thing is true, money changers can sell bitcoins without having it; That is why such a thing can not happen.

However, digital currency exchanges have not denied such a move. EB He, head of the LBank, told Kevin Telegraph that money changers who do this will be punished.

He explained:

The market teaches a good lesson to exchanges that sell their users’ bitcoins; Because they can not redeem the bitcoins they have sold. Such exchanges will definitely fail.

He also said that digital currency exchanges, which are growing and flourishing, are strong believers in digital currencies. They believe that bitcoin can fetch up to $ 100,000, and as a result, instead of doing dubious things like selling other people’s bitcoins, they buy the digital currency themselves.

So far, only Bainance Exchange has responded to this issue. A spokesman for the exchange said in a statement to Kevin Telegraph that digital currency exchanges were not allowed to transfer their users’ funds without their consent. He said about Bainance exchange that the company does not open trading opportunities with users ‘assets and stores users’ digital currencies in complete security and in cold offline wallets inside the exchange.