Topic: People are giving too much importance to exchanges - page 5. (Read 1225 times)

These are temporary effects of market sentiments. If you really want to make your savings usable anytime, you should consider choosing something other than Bitcoin. The market is volatile and we all know that. So this kind of scenario happens now and then. No big surprise there. Bitcoin is the best asset for investing and not only that, it has to be a long-term investment plan. After every bear market, there will be a bull market as well. So waiting for that is going to be a long time.
Exchanges are not the main reason here. It is all part of big market sentiment. Many negative news or events creates this kind of situation and they will fade away eventually. All we need to do is hodl. But if you mix your savings with it, you won't be able to get the best results. It has to be an investment asset, not a saving. CEXs are bad, and we should not keep our assets there. We should only use what it's created for. I like to do my work in CEX and then move all my assets to a private wallet. I also don't give a damn if they are gone.

There are very few people that keep their coin on exchange for trading, most of the newbie keep their coins on exchange for holding and some old users also do this. We have many people staking their coins on exchanges which is why exchange have so many coins in their wallets. For traders, using exchange to store their trading capital, they already know that they're risking their coins.

But for individuals thinking exchange are the best place to hold their coins, they're the individual this post is focused on because they would regret choosing exchange over personal wallets when the exchange disappears with their coins or collapse due to hacks.

Indeed, it can be seen in behavior and can be observed in the stock market, where people tend to overreact. However, it also highlights the relatively small and concentrated nature of the bitcoin market. Even though some countries have multiple banks, this abnormality suggests that there may be an insufficient number of exchanges, causing a downward move to impact the overall value of bitcoin.

The reminder created by theymos should be an important warning to anyone, that storing BTC on a centralized exchange is not a smart solution for securing our assets. Regardless of whether people keep assets on a centralized exchange like Binance or not, it will be the responsibility of each individual and they will be the ones who will suffer the consequences when something happens. But for me the move to secure the asset is important, moreover bitcoin is quite valuable in the long term and even if a centralized exchange is used it is only a short term trade.

For the problems caused by the situation that happened on binance to the entire crypto market and indeed it will be significantly affected and today we have seen how crypto or bitcoin is corrected. We often encounter market sentiment and it is not only influenced by exchanges, but there are also several other things that make bitcoin continue to have an impact on the market and when everything is normal it will return to be better.

Yes it's true and 1 BTC will remain 1 BTC definitely won't change, we hope this incident will pass and will not affect anything, especially the confidence in BTC because we have seen a long term store of value. When it comes to exchange there is a lot of coming and going in this industry and it is a normal occurrence and there is no need to overreact.

If it were just a minor incident, it would not cause a stir in the community or create panic sell. Although exchange and bitcoin are two completely different entities, it is not true to say that they are unrelated or do not affect each other much. If they had nothing to do with each other, there would be no panic in the market.

On the contrary, for me, they are closely related. As we know, investing in bitcoin and participating in the market will mainly go through exchanges. Exchanges need bitcoin to survive because people invest in bitcoin, not in exchanges. Bitcoin can exist without an exchange, but to grow bigger and more popular, an exchange is indispensable. They are really related.

I think that this is almost the same as stocks, I think people always overreact. On the other hand, it shows how small and concentrated bitcoin is. Whereas in all countries there are many banks, and if one bank collapses, the currency will not follow.

But one exchange sued (has yet to collapse), and currently bitcoin lost 5% in a fairly short amount of time. It's not normal. There may not be enough exchanges, so going down shouldn't have any effect on the value of the bitcoin.

I like when you say this, I also believe the people who always say that leaving money on centralized exchanges is risky and stay away from them or those who always say they never use them. Many of them are trying to lie to please the crowd, and behind the scenes, they still use and store their bitcoins on CEX. Looking at the trading volume and the number of bitcoins that centralized exchanges are holding for customers, it can be seen that up to 80-90% of investors are putting money into exchanges.

Exchange issues can affect the price of bitcoin, even for a sustained period but the OP is right, people do give too much importance to exchanges. Bitcoin will be here for a longer time than all currently existing exchanges. They can all go down & whilst the BTC/USD exchange rate may go down, 1BTC = 1BTC, nothing can change that.

I’m well aware of the current problems Binance & Coinbase are having with US regulators but let’s look at the bigger picture. Bitcoin is fine & will get through whatever they throw at us.

These are just small incidents which stuns the Bitcoin community, hence many people sell their Bitcoins in panic and fear. As there are more sell orders then buy ones, therefore the price also falls down. It’s normal and doesn’t affect for long term goals. Once everything settles, more people buy the coins and hence the price goes up again.
So yes exchanges and Bitcoins are two completely different entities, but they affect little to each other parallely. So yes people need to stop giving huge importance to these news.

Oh, believe me, many, many people store their assets on exchanges, even many on this forum do so. If you remember how exchanges scammed and got hacked, there were so many sufferers and lost funds!

If we'll look at how many bitcoins of clients Binance stores on its wallets, it will be a significant amount. So any problems with Binance will definitely impact the entire crypto market. This is a situation when the quantity is turned into quality.

Not to be worried a lot we should remember that 1BTC is always 1BTC. All temporary problems with centralized projects will pass and what we have will stay with us.

I agree, Binance deserved all the power they got and that's why it should be considered as a great thing, there is nothing that shows they have done anything bad for the crypto world. Yes they are as powerful as an exchange could get but that doesn't mean that they did anything wrong, they are quite alright with what they have done so far.

I know that people are worried about what they are going to do when it is not that easy to handle, but that doesn't mean that it is not going to be simple neither, it is going to be quite tough for Binance as well. When you consider them as the biggest exchange ever to exist, do you think that's an easy thing to do? They deserve it because they managed to handle being that big without hurting anyone or doing anything wrong.

The thing is people use exchanges only for the short trades they make and some people on the forums I'm sure don't store bitcoins on binance or other centralized exchanges but because binance provides a trading service some people still use them today in trading. I've used Binance several times for short trades but it's not for long term use and for day traders maybe some people use a centralized exchange only for trading.

Because it's impossible every day they have to transfer assets to their wallet every time they finish trading, Bitcoin has never followed that centralized exchange which you have to understand and bitcoin has never had anything in common with exchanges as the two are quite different. Who cares if binance is lost or not?

And what kind of way out do you offer for those who are engaged in everyday trading and who need to have constant access to the exchange? Cold wallets are, of course, more reliable and safe, but you can’t really trade with them. With the cold wallets the exchange rate update is late, and the commission is higher, and transactions are not completed so quickly. The exchange is more convenient for trading, no doubt.

Ftx was big, so is binance, of course market gonna give some damn when they go down.

I understand why some people are preferred to keep their Bitcoins in an exchange wallet and that is for trading, not for holding. But these people know what will happen when an exchange got scammed or whatever, yet they still do it despite the risk because of their trust. It could be a manipulating power that most exchanges injected into the mind of the holders. We know it was wrong but can't change their stances as well as it was their choice. They will change their minds when experiencing losses of their funds from exchanges.

There are many people who believe in Bitcoin and exchange it using centralized exchanges to keep their assets safe as they think it is best. If a person thinks like this then it is not at all beneficial to protect his wealth. But I think a bitcoiner will never do such a stupid thing to keep his exchange assets safe, rather he will have different security wallets.
Bitcoin price is not always at the same level it is always based on ups and downs. The price of Bitcoin is not controlled by anyone but follows the various directions of the market. But we saw a lot of people lose their wealth when FTX went bankrupt. At that time the Bitcoin market also became quite a bear market and most people suffered a lot from it. But the fact that the Binance CEO has been sued may have caused the price of Bitcoin to drop again. Because then many people heard about this incident and sold bitcoins due to which the market went down a lot. But the market never stays the same it goes back to its previous position again and again because bitcoin market is never permanent it is always temporary. But one should never lose faith in investing in Bitcoin but be patient. So I would suggest you if you have invested in Bitcoin then definitely try to hold it. And invest from bear market and later you wait till bull market then there will be high profit potential.

Most bitcoins are speculative. They are located mostly on exchanges, bad news will always affect bitcoin, Speculators will take profits when possible

Your viewpoint does carry weight; it's true that trusting centralized exchanges entirely could potentially be risky. However, let's not neglect that these platforms have catalyzed the crypto revolution for the common man. For many, exchanges like Binance have been the gateway to the world of crypto, simplifying the process of buying, selling, and holding digital assets.

Yet, I agree that complete reliance on such platforms for asset security could be a bit naive. The mantra in crypto circles, "Not your keys, not your coins," still rings true. An ideal approach might involve using hardware wallets or other self-custodial solutions, along with exchanges.

As for the FUD impacting Bitcoin prices, I concur that emotional trading often leads to volatility. In such scenarios, the classic advice of HODLing (Hold On for Dear Life) seems most apt, don't you think?

The stock market is a place for trading cryptocurrencies, not a valuation place. The relationship of exchanges with the valuation of cryptocurrencies is indirect and they interact with each other. The majority of people prefer to keep their Bitcoins on exchanges rather than in cold wallets, and they want to quickly dispose of BTC in case of a possible negative situation. I think these people have nothing to do with investing and aim to profit from price changes in the stock market.

Many of us do this by the way. It would be interesting if the dangers to be experienced in the Exchanges do not affect the prices, as the exchanges are intertwined with the crypto markets. The stock market and cryptocurrencies will always be intertwined, and it is difficult to think of one without the other for this reason. If you have Bitcoin you are lucky and keep it in the cold wallet.

I don't think it's about these people believing in the fact that Binance will secure their assets better than they could, I mean this is a CEX that gets hacked and robbed from almost every year by the millions, I don't think it's going to scream "security" anywhere, although you're right, there's a good amount of people in this industry who thinks that Binance will take care of their assets. Although going back, that is not what I think is the reason why.

Bitcoin as it stands today's accessible through multiple channels, but it would be stupid and dishonest to say that Binance and Centralized Exchanges aren't a way for these people to get into crypto and start their cryptocurrency journey. It's been like that for years, and the recent barring of Binance and the legal implications it carries with it just spells "we can't use bitcoin anymore" to people who were introduced to cryptocurrency by Binance. And it being a major player in the industry too, makes a lot of people lose confidence in the industry, hence the drop in valuation.

You could say that OP is right, people are giving too much importance over exchanges, but that attention is warranted and deserved, as they played a great part in introducing regular people into this industry too, especially in the 2019-2023 mark.