Since the bear market of 2018, major exchanges have been accumulating record high amounts of Bitcoin.

As Bitcoin becomes more widely recognized by the public, the circulating supply of Bitcoin held by cryptocurrency exchanges has been increasing year by year, accounting for 6.7% of all long-term holders (HODLers) to date. This trend has been strengthening since 2017.

Cryptocurrency exchanges play a crucial role in the crypto industry, not only providing liquidity and convenience for users to trade, but also creating a competitive environment for the entire market.

Furthermore, exchanges are among the largest holders of Bitcoin in the crypto market, and historical data suggests that the amount of Bitcoin held by exchanges continues to increase.

According to TokenAnalyst, exchanges are the largest HODLers in the cryptocurrency market to date. They hold approximately 6.7% of all circulating Bitcoin, valued at around $9.8 billion.

Interestingly, exchanges tend to increase their holdings every time Bitcoin faces a major downturn. For instance, during the bear market of 2018, major exchanges continued to expand their Bitcoin holdings.

Currently, exchanges hold a higher percentage of Bitcoin than ever before.

Mainstream exchanges like Huobi, Binance, and Bitfinex seem to be actively accumulating their holdings. Clearly, these exchanges see it as an opportunity to accumulate cheap Bitcoin.

In addition to the mentioned exchanges, the data provided by TokenAnalyst does not include Gemini and Coinbase. Other non-mainstream exchanges also hold significant amounts of crypto assets, not just Bitcoin, but various other cryptocurrencies as well.

However, this data raises a question: is it even a good thing for exchanges to hold a large amount of Bitcoin? Do we need centralized exchanges to custody decentralized Bitcoin?

In fact, after experiencing several major hacking incidents in the past, exchanges today may be more secure than ever. And the professional knowledge required for storage devices like cold wallets is still not easily accessible, making exchanges one of the best options for the general public to first engage with cryptocurrencies.

Furthermore, the infrastructure of decentralized exchanges is still not mature enough. Therefore, the increase in Bitcoin holdings by exchanges is not necessarily a bad thing. Besides providing trading liquidity, what is crucial is that they have proper security measures in place to prevent potential theft.

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