One of the biggest factors that sets Bitcoin (BTC) apart from fiat currency and most cryptocurrencies is the cap of 21 million capitalization on its total circulating supply. Nevertheless, the demise of various cryptocurrency exchanges in the past decade has taken at least 5.7% (1.2 million BTC) of total issuable Bitcoin out of circulation.
The lack of clarity surrounding a cryptocurrency exchange’s proof of reserves came to the fore as the main reason for its sudden crashes, as seen recently with FTX. Historical data around cryptocurrency crashes revealed that 14 cryptocurrency exchanges together were responsible for the loss of 1,195,000 BTC, representing 6.3% of the 19.2 Bitcoin currently in circulation.
An investigation carried out by Jameson Lopp, co-founder and CTO of Bitcoin storage platform CasaHODL, revealed that Mt. Gox maintains the top position when it comes to exchanges that lost BTC holdings.
While Bitcoin’s scarcity is directly related to its value as an asset, Lopp noted that fake Bitcoin offers currently threaten the ecosystem, adding that “Bitcoin won’t be much of a store of value if most people are buying fake bitcoin”. Research confirms that at least 80 crypto assets have “Bitcoin” in their names, with the sole aim of deceiving BTC investors.
As a result, investors buying fake Bitcoin assets negatively affect the price appreciation of the original Bitcoin.
80+ crypto assets have the word “bitcoin” in their name.
14 have a market cap over $1,000,000.
3 claim to be Bitcoin.
1 is Bitcoin.— Jameson Lopp (@lopp) September 22, 2022
More than 80 crypto assets have the word “bitcoin” in their name.
14 have a market capitalization greater than USD 1,000,000.
3 claim to be Bitcoin.
1 is Bitcoin.
To ensure Bitcoin’s position as sound money, self-custody is presented as the most effective way to reduce reliance on cryptocurrency exchanges and “paper Bitcoin” corporate contracts.
Salvadoran President Nayib Bukele announced plans to acquire 1 BTC every day starting November 17, 2022.
We are buying one #Bitcoin every day starting tomorrow.
— Nayib Bukele (@nayibbukele) November 17, 2022
We will be buying a Bitcoin every day starting tomorrow.
Public records show that El Salvador currently holds 2,381 BTC at an average purchase price of $43,357. Nevertheless, Bitcoin’s stagnant performance opened a window of opportunity for the country to substantially lower its average Bitcoin acquisition price.
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