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After Grayscale Investments shared information regarding the company’s products, people wondered why the company wouldn’t share the public addresses associated with the crypto assets it holds. However, on November 23, OXT researcher Ergo posted a Twitter thread featuring on-chain forensic analysis that confirms that Coinbase Custody holds a balance of 633,000 bitcoins that likely belongs to the Grayscale Bitcoin Trust (GBTC).

OXT researcher verifies Grayscale’s bitcoin holdings

Five days ago, News reported on Grayscale disclosing information related to the safety and security of the company’s digital assets. Grayscale’s statements were meant to assure the public that the company’s cryptocurrencies are “safe and secure” following the collapse of FTX.

The digital asset fund manager clarified that all of the company’s digital assets are stored with Coinbase Custody Trust Company. On Grayscale’s website, the company states that Coinbase Custody is a qualified custodian under New York banking laws and funds are held in “cold storage.”

The only thing Grayscale didn’t disclose were the addresses of the company’s digital assets and it mentioned why it chose not to share the wallets. Grayscale explained that it has never publicly disclosed on-chain addresses to the general public “for security reasons.” The allegation was criticized and mockedbut Grayscale said it understands non-disclosure would be “a disappointment to some.”

Despite Grayscale’s non-disclosure, the OXT researcher ( ergonomics explained that he started a community-led effort to create transparency around GBTC’s holdings. “We have taken steps to identify probable GBTC addresses and balances based on public information and blockchain forensics,” Ergo said November 20.

Onchain analysis verifies the number of BTCs held by Grayscale's Bitcoin Trust
Ergo said the research team “scanned the blockchain”, exploited heuristics, and connected publicly known bitcoin addresses.

Leveraging a Coindesk article, heuristics, and publicly known bitcoin addresses associated with custodian Xapo, that day Ergo “assigned 432 addresses holding 317,705 BTC probable custodial activity of GBTC.

The researcher uncovered at least 50% of GBTC’s holdings and added: “further work is required to identify the remaining addresses.” As of 2:49 p.m. (ET) on Nov. 23, Ergo said the additional work was complete in a Twitter thread titled, “The Grayscale G(BTC) Coins Part 2” Ergo tweeted:

In this analysis, we use [onchain] forensics to CONFIRM the approximate 633K BTC balance held by G(BTC) at Coinbase Custody.

Ergo’s summary notes that after discovering the first 50% of bitcoins associated with Grayscale BTCthe team had to “scan the blockchain” to find additional addresses matching the profile of those found in Part 1.

Onchain analysis verifies the number of BTCs held by Grayscale's Bitcoin Trust

Ergo also leaves independent analysts with information about heuristic used and the bitcoin addresses compiled for research. “Obviously, no heuristic or set of heuristics is perfect, and this analysis certainly includes false positives and false negatives,” Ergo noticed. “But our result is almost identical to the G(BTC) self-reported assets.

In the Twitter thread, Ergo says he doesn’t know why Grayscale decided not to share company information. BTC addresses. Ergo said the team originally thought Coinbase Custody might have a non-disclosure policy. But after reading some information published by Coinbase, Ergo said “It seems clear that Coinbase Custody is willing to release the addresses.”

A Number people complimented Ergo’s Twitter feed and GBTC parts analysis. Additionally, the news follows Coinbase CEO Brian Armstrong explaining that as of September 30, Coinbase holds 2 million bitcoins.

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What do you think of Ergo’s on-chain analysis of GBTC’s bitcoin horde? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the news manager for News and a fintech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written over 6,000 articles for News about disruptive protocols emerging today.

Image credits: Shutterstock, Pixabay, Wiki Commons, Ergo BTC, Grayscale logo,

Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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