Amid concerns and panic surrounding lawsuits against major cryptocurrency exchanges, one Bitcoin advocate argues that the BTC market extends beyond the exchanges commonly tracked. According to Jan3 CEO Samson Mow, the total Bitcoin market cannot be solely quantified by exchanges like Binance or Coinbase.
Mow explained at the BTC Prague conference on June 9 that a significant portion of Bitcoin trades occurs through block trades, which take place in private trading channels. These channels, such as peer-to-peer (P2P) or over-the-counter (OTC) deals, allow investors to negotiate and execute large BTC buy or sell orders privately. As a result, the true size of the Bitcoin market remains unknown.
Popular crypto tracking websites like CoinGecko do not include private Bitcoin trading channels in their total BTC trading volumes. CoinGecko co-founder and COO, Bobby Ong, confirmed that their platform only tracks trades occurring on crypto exchanges and not on P2P platforms or brokerages. Similarly, institutional trades conducted over-the-counter are not recorded by CoinGecko.
The remarks from Jan3 CEO highlight that cryptocurrency exchanges like Binance and Coinbase might not dominate the Bitcoin market to the extent previously believed. A Norwegian crypto research firm, K33 Research, reported in January 2023 that Binance handled 92% of the Bitcoin spot market in 2022, suggesting its significant influence. However, the prevalence of block trades in private channels indicates a larger Bitcoin market beyond what is observable on exchanges.
The true extent of Bitcoin trading activity, especially through private channels, underscores the complexity of accurately measuring the overall market size. As P2P functionality is a fundamental aspect of Bitcoin, quantifying the total traded volume becomes challenging. This highlights the need for a more comprehensive approach to analyzing and understanding the complete Bitcoin market ecosystem.
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