Coinbase has become super well-known in the market. It was the first crypto company to get listed on the S&P 500
[1] and holds custody of up to 12% of all the BTC out there
[2]. I know lots of folks have a ton of faith in Coinbase, but sometimes even Coinbase can't promise total security for everyone using it.
BlackRock also had a deal that let them pull BTC from Coinbase within 12 hours
[3], and they're also looking to spread out where they keep their BTC to make things even safer
[4]. Just recently, we saw Coinbase get hacked, and some of their customer info was compromised
[5].
I still remember Coinbase didn't want to share their Proof of Reserves because they really value all the info about their customers, like how much stuff they have on Coinbase
[6]. Now that some of that info has been leaked, it feels like anything could happen, even stuff Coinbase might not expect or be able to handle.
This makes me a bit worried about a possible black swan event down the road if Coinbase gets hit with a big attack and over 2.5 million BTC get stolen from their control. Coinbase is so big now that if it went under, it could be even worse than when Mt Gox collapsed, and they only held around 850K BTC
[7].
Since I'm not a US citizen, I don't use Coinbase myself, but if it did collapse, it would totally shake up the whole crypto market and hurt my own investments. I really hope Coinbase is putting the best plans in place to keep their and their customers over 2.5 million BTC super safe.
I'd like to know your perspective on this:
- Is Coinbase the next weak point in the crypto market?
- Could Coinbase's collapse drag the entire crypto market into a new crisis?
- Could everything happening with Coinbase be a deliberate setup by market makers?
References:1.
Coinbase jumps 24% on S&P 500 inclusion, biggest gain since post-election pop2.
Coinbase: the standard in crypto custody3.
BlackRock Tightens Bitcoin ETF Withdrawal Rules Amid Investor Concerns4.
BlackRock has a new Bitcoin custodian besides Coinbase5.
Coinbase says hackers bribed staff to steal customer data and are demanding $20 million ransom6.
TRON CEO Justin Sun Criticizes Coinbase for Ignoring Proof of Reserves7.
Mt Gox hack explained