Bitcoin (BTC), the largest cryptocurrency by market cap, recovered a bit after dipping below the $20,000 level. The news that Binance purchased a whopping 101,266 BTC at lower prices made the rounds across a number of news websites. However, the CEO of the exchange, Changpeng Zhao (CZ), has come out to refute the claims.
CZ: Where the Media Got It Wrong
According to the recent tweet by CZ, the news was a total misconception. Binance did not buy such a whopping number of Bitcoin but was deposited into the cold wallet by users who were increasingly buying BTC via the exchange at lower prices.
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CZ tweeted, “Another wrong article. When Binance cold wallet increases, it means more users deposited to Binance. This journalist doesn’t seem to under the concept of cold wallets for exchanges.”
Another wrong article. When #Binance cold wallet increases, it means more users deposited to #Binance. This journalist doesn't seem to under the concept of cold wallets for exchanges. 😂
» Breaking: Binance Buys The Dip, Adds 101,266 Bitcoin https://t.co/RbrAHiUL2t
— CZ 🔶 Binance (@cz_binance) June 19, 2022
What Are Cold and Hot Wallets
Cold wallets are regarded as the safest option for storage. A cold wallet can simply be described as a wallet that is not connected to the internet and therefore stands a far lesser risk of being compromised. It can also be referred to as an offline or hardware wallet.
Cold Wallets store a user’s address and private key on a device that is not connected to the internet. They come with software that works in parallel to give users the means to view their portfolios without putting their private keys at risk.
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As they clearly sound, these are different from hot wallets. Online wallets can also be referred to as hot wallets. They are wallets that run on devices that are connected to the internet, such as computers, phones, or tablets.
Although hot wallets are more convenient to access for users when making transactions compared to cold wallets, they can be compromised easily. This implies that they lack security, unlike cold wallets.
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