What’s Going On?
Freshly-minted Bitcoin billionaires are hoarding $10bn worth of the cryptocurrency – about seven percent of the global supply – with a single start-up, it has emerged.
Why Does It Matter?
Argentine entrepreneur Wences Casares established Xapo to hold bitcoin for cautious investors, including those with significant crypto fortunes who want maximum protection for their money and the private key that protects it, reported Bloomberg.
Xapo’s solution is to bury cold-storage devices in a mountain and add electronic safeguards on top. The company has vaults on five continents, including some buried deep in the Swiss mountains, reported Popular Mechanics.
Why Is This Happening?
Hackers have demonstrated they can sometimes access cold-storage devices the moment an unsuspecting investor puts them online. Criminals have carried out home invasions and kidnappings and some crypto tycoons have had to change their identities and beef up security at home, which has lead to billions being placed with Xapo for safekeeping.
Two Xapo clients said the company stores roughly $10bn of Bitcoin, reported Bloomberg, who added that another insider called the figure “an accurate approximation”. If these figures are accurate, it would mean four-year-old Xapo has more Bitcoin on its books than all but two percent of more than 5,650 banks doing business in the United States today.
“Everyone who isn’t keeping keys themselves is keeping them with Xapo,” said Ryan Radloff of CoinShares, which has more than $500 million of Bitcoin stored at Xapo. “You couldn’t pay me to keep it with a bank.”.