According to recent research by Chain.info, more than 10% of the total available Bitcoin supply is held by five major exchanges. Huobi, Binance, OKEx, Kraken and Coinbase hold more than 1.96 million Bitcoin, with Coinbase holding more than any of the other exchanges. Huobi has the second most with a total of 323,665 BTC across around 901,600 unique wallets, with Binance in third place with 289,961 BTC held in nearly 2.7 million Bitcoin addresses. There is a big gap between the holdings of the top five exchanges, and the rest of the mid-tier exchanges. The smallest of the top five is Kraken, with 126,510 Bitcoin – and the next seven largest which are Poloniex, Bitflyer, BIttrex, Coincheck, Bitfinex, Bitstamp and Gate.io only hold hold 210,000 Bitcoin combined.

Why it matters: Despite the decentralized nature of cryptos, the market remains highly centralized in terms of which entities hold the vast majority of the valuable tokens. As centralized exchanges take possession of the tokens, users have to give up their private keys when using the exchange, which essentially makes the exchange a custodian of the cryptos. The custodial agreements that users on the major exchanges accept may not be as strong as in other markets, where there are safeguards in place to protect the clients in the event of a bankruptcy or other unforeseen catastrophe. Given the amount of Bitcoin on deposit with only five exchanges, there seems to be a high probability of something unexpected happening sooner or later.