It is not every day that Bitcoin investors get a reminder of how quickly the crypto-asset has grown through the years and its potential to replicate such a massive increase in the future.
Allen Walton of Spyguy.com recently shared one such story on his Twitter handle, revealing how a $1 worth of Bitcoin he had received sometime in 2016 was now worth around $65. The $1 in bitcoin in February 2015 was worth around 0.003696 BTC, with Bitcoin trading at a roughly $249 price per coin on the day.
The amount was credited for completing a bank verification process on Coinbase at the time and represents a roughly 65x increase in the price of Bitcoin from then to date. Bitcoin was trading at a $15950 price at the time of writing, with a $295 billion market cap.
Finally got into my Coinbase account.
Funny story – my brother told me to get in on it back in 2014 or so.
I opened my account and it needed to verify my bank – would give me $1 once verified.
Then I forgot about it.
Now it’s worth $65.
— Allen Walton (@allenthird) November 16, 2020
Although a larger investment would certainly be worth more today, Walter’s story raises questions regarding whether tier-one cryptocurrency exchanges like Coinbase are a good alternative for investors to store their long-term Bitcoin holdings.
Are CEXs Like Coinbase Safe For Long-term Storage?
According to Walton, who is apparently seeking to get back to Bitcoin after many years, the primary difficulty he faced with regaining back access to the old Coinbase account was a “customer support hell.”
He told Coinfomania that Coinbase’s support team “were using canned answers that didn’t address [the] problem at all, and it was taking them 2 days to respond to each email.” But, he did regain access after passing the exchange’s scrutiny exercise.
On the other hand, many cryptocurrency holders have lost funds worth millions of dollars simply because they chose to self-custody their assets and lost their private keys for different reasons. Worth noting, too, is that many cryptocurrency exchanges such as QuadrigaCX, Cryptopia, and recently KuCoin have suffered situations that put users’ funds in jeopardy over the same period.
In summary, it would seem that a user’s level of experience (beginners) with Bitcoin means that tier-one cryptocurrency exchanges offer a degree of protection, just in case, they’re going to forget their investments and need to get back to them in the future for a $65 paycheck.
Update: We edited the article to include comments from Allen Walton regarding his experience with the Coinbase CS team.