Binance Survey: Over 90% of Crypto Investors Hold Their Digital Assets with Crypto Exchanges
Data from a recent survey conducted by Binance has revealed that over 90% of the participants keep their digital assets with 3rd parties like crypto exchanges as opposed to cold wallets. This is despite a high risk associated with the security of digital currency exchange platforms.
The market survey is part of an ongoing institutional research insight being carried out by Binance and is currently in the second phase. According to the responses, most crypto HODLers do not have direct control of their digital currencies. Over 69 out of the 76 institutional investors who participated confirmed that their digital assets are held by trusted 3rd parties.
One would think with that hacking attempts might have persuaded investors otherwise but it is nothing close. Hardware wallets popularity is growing slower than expected although upcoming initiatives like Proof of Keys annual event may increase their awareness. The researcher from Binance confirmed that their crypto storage facilities were by far more popular;
“Exchanges remain as the most popular choice for cryptoasset storage amongst our institutional and VIP clients at 92.1%.”
He also noted that cold wallets were the next option for investors who prefer control over their cryptocurrencies while 3rd party custodial services have the least market share. The participants in this survey however were not significantly exposed given their holdings is below 10 BTC.
The Importance of Private Keys
Crypto investors need to understand the risks associated with storing their coins on digital exchanges. The regulatory pressures are among factors that can make one lose their portfolio. Cases of frozen funds have affected both entities and individuals within the crypto market besides the long KYC processes.
Private keys would eliminate some of these risks since crypto users have direct control of custody. In addition, they are less prone to hacking attacks given their infrastructure. It is also very easy to withdraw from hardware wallets compared to 3rd parties who are required to be information compliant by authorities.