Binance holds in its cold wallets about $2 billion worth of ethereum based tokens and just around half a billion worth of eth itself.
The exchange moved some 2 million eth recently for a fee of 8 cent with it appearing to be from one cold storage address to another.
In the process they revealed their ERC20 and other ethereum based token holdings with Tether, of course, being the biggest one.
The other stablecoins like TrueUSD and USDCoin also have substantial holdings of about $170 million in combination.
Holo seems HOT with $50 million while PAX has about $70 million. Then there’s the countless other tokens, with Binance listing pretty much everything.
All of these tokens are on the ethereum address, and thus controlled by its private key. Meaning some $2 billion was moved for 8 cent.
Binance undertakes such movements somewhat often as a security precaution, with it unclear – for obvious reasons – what process they use.
Just as it is unclear whether these tokens reflect on eth or detract from it.
They increase security because they pay gas fees, but they demand more capacity than a simple ethereum transaction.
Those fees have to be paid in eth, so an increase in token usage should arguably increase demand for ethereum.
On the other hand, such fees are minuscule compared to the actual demand that might go towards the token rather than eth.
Something bitcoin saw when it was as old as eth currently, back in 2013-14, when numerous cryptos launched with different value propositions.
Bitcoin’s “solution” was to differentiate itself as doing one thing and doing it well: being a store of value.
That’s the third component of money. Bitcoin is obviously a unit of account. It can be a means of exchange, but not a competitive one for now expect for in niche cases. The focus instead is as a store of value which it does perform and fairly well.
Ethereum is currently kind of at that same stage of figuring out just what is its value proposition compared to all the other options.
Much is in flux with highly ambitious plans for global level permissionless scalability.
Whether they’ll be able to achieve it remains to be seen. Making eth a somewhat unique bet in this space because there can be a lot of upside if they do manage to reach their destination, just as there’s plenty of foreseeable and unforeseeable chances of falling somewhere on the way.