As the world is watching, the venerable crypto exchange Bitfinex, one of the remaining pioneers from the early days of cryptocurrencies, appears to be keeping Bitcoin on its balance sheet. This intriguing choice was not made public via an official press release, but tactfully outed by an individual possessing firsthand information. While it isn’t certain when the exchange started this practice, it seems that a portion of the trading fees have been consistently converted into Bitcoin as an expression of faith in the original digital currency.
This move certainly brings to the fore interesting pros and cons for crypto exchanges keeping cryptocurrency stashes. In its favor, there is an implied endorsement of Bitcoin as a long-term investment, sustaining its value and potentially spurring more trust in the coin. Furthermore, adopting this strategy signals a firm belief in the promise and potential of cryptocurrencies in general.
However, conversely, potential issues arise when crypto exchanges begin holding considerable amounts of cryptocurrencies on their balance sheets. For example, if such holdings are significant in size, it could potentially sway crypto markets, going against the principle of decentralization and fairness in crypto trading. This could be perceived as a conflict of interest, and may create doubts about market manipulation.
The Bitcoin maintained by Bitfinex are said to still function as a reserve asset today according to the mysterious source. Paolo Ardoino, the exchange’s chief technology officer offered hints on Sunday via a cryptic tweet implying Bitfinex reinvests profits into Bitcoin. Simultaneously reiterating their involvement with Bitcoin layer-2 protocols, Lightning Network, RGB, and Liquid.
Besides Bitfinex, its closely affiliated stablecoin issuer, Tether, is also known to hold Bitcoins on its balance sheet, totaling to an estimated $1.58 billion. It is a known fact that Tether, during Q2 of this year, purchased $45.4 million worth of BTC and aims to assign 15% of its quarterly profits to Bitcoin.
Now, both these companies, Bitfinex and Tether are directed by the same people, notably, Jean-Louis van der Velde and Paolo Ardoino. This casts a spotlight on the significant influence these companies and their leaders could have over the future of Bitcoin and the greater crypto market. As the crypto space eagerly absorbs this new revelation, it certainly thickens the plot and might just spur other crypto exchanges to declare their hidden crypto stashes.
Source: Cryptonews
