Bitcoin sets itself apart from traditional currencies and most other cryptocurrencies by having a strict limit of 21 million on its total circulating supply. However, due to the closure of several crypto exchanges in the past decade, around 5.7% (1.2 million BTC) of the total possible Bitcoin has been permanently taken out of circulation.
The primary reason behind these abrupt exchange closures was the lack of transparency regarding their proof-of-reserves. This vulnerability was recently highlighted with FTX. Analysis of historical data related to crypto market crashes showed that the collective failure of 14 exchanges led to the loss of 1,195,000 BTC, which accounts for 6.3% of the 19.2 million Bitcoin currently circulating.
An investigation led by Jameson Lopp, co-founder and CTO of Bitcoin storage platform CasaHODL, identified Mt. Gox as the leading exchange in terms of lost BTC holdings.
While the scarcity of Bitcoin directly influences its value, Lopp emphasized the threat posed by fraudulent Bitcoin offerings. He warned that if a significant number of people invest in fake Bitcoin, it could undermine the perception of Bitcoin as a reliable store of value.
Research has uncovered over 80 crypto assets with “Bitcoin” in their names, with some deliberately misleading BTC investors. Such deceitful practices harm the original Bitcoin’s price growth.
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
To safeguard Bitcoin’s status as a stable form of money, opting for self-custody emerges as the most reliable method to reduce dependence on exchanges and artificial “paper Bitcoin” contracts.
President of El Salvador, Nayib Bukele, announced a daily purchase plan of 1 BTC starting from November 17, 2022.
We are buying one #Bitcoin every day starting tomorrow.
— Nayib Bukele (@nayibbukele) November 17, 2022
Public data indicates that El Salvador currently owns 2,381 BTC bought at an average price of $43,357. The recent stall in Bitcoin’s performance has provided an opportunity for the country to significantly lower its average Bitcoin acquisition cost.
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