Crypto Exchanges Offer Paper Bitcoin Claims Market Analyst
-A market analyst has argued that bitcoins held on exchanges are nothing more than paper bitcoins that depresses the price of BTC.
-Rufas Kamau of Scope Markets Kenya made the statement in a Twitter thread on May 8.
-According to Kamau, a bitcoin that is bought and held on an exchange amounts to little more than an IOU or paper bitcoin.
-Exchanges manage the real bitcoin in much the same way as a bank manages customer money; by selling, lending, and leveraging that liquidity for profit.
-This leads to the proposition that when users buy bitcoin on an exchange, the liquid supply of bitcoins does not decrease as most people might expect.
-Ultimately, by fractionalizing bitcoin, as a bank would fractionalize money, the price of bitcoin is pushed down.
-For Kamau, this is yet another reason, beyond security and privacy concerns, why BTC investors should remove their bitcoin from exchanges: to push the price of the asset upwards.
