Coinbase’s Impending Milestone in Bitcoin Holdings
Coinbase Global, a leading player in the cryptocurrency exchange market, is on the cusp of achieving a significant milestone – holding 1 million Bitcoins. The exchange needs only an additional 5,019 Bitcoins to reach this landmark. This notable growth in Coinbase’s Bitcoin reserves, which increased by 16,404 Bitcoins over the past fortnight, has brought the company closer to this remarkable threshold. Coinbase’s BTC holdings stand at 994,981, valued at $42.17 billion, placing it as the second-largest Bitcoin holder in the industry, just behind Satoshi Nakamoto.
Coinbase’s Role in the ETF Landscape and Impact on BTC Reserves
Coinbase’s Bitcoin reserves surge is partly attributed to the flurry of activities among the ten new U.S.-based spot Bitcoin exchange-traded funds (ETFs). Since January 12, 2024, while Grayscale’s GBTC reserves have diminished by 114,367.39 BTC, the other nine ETFs have collectively accumulated 132,170 BTC since their inception. Most of these ETFs, excluding Vaneck and Fidelity, use Coinbase for custodial services, contributing to the increase in Coinbase’s BTC reserves. This suggests that Coinbase’s custodial role for these ETFs, possibly involving offchain swaps with Coinbase as the intermediary, has significantly impacted its Bitcoin holdings.
The Broader Implications of Rising BTC Reserves on Exchanges
Coinbase’s journey towards the 1 million Bitcoin milestone is not an isolated event in the crypto market. Other exchanges have also seen an influx of Bitcoins since the start of January. Data from cryptoquant.com shows that exchanges’ BTC holdings have risen from 2,087,030 BTC on January 1, 2024, to 2,100,984 BTC, an increase of 13,954 BTC over 28 days. This overall increase in BTC reserves across exchanges typically indicates a rise in selling pressure, while significant withdrawals suggest a reduction in market liquidity. As Coinbase nears its historic milestone, it holds 5.07% of the total circulating Bitcoin supply and 4.73% of the total 21 million Bitcoin supply cap, highlighting its substantial influence in the cryptocurrency market.