Which Crypto-Exchanges Survived the Bear Market?
That the ongoing bear market in the crypto industry has an impact on all projects and companies should no longer be a secret. Venture capitalists are becoming more cautious, mining is no longer viable for many, prices are falling, and new investors are reluctant to enter the crypto market. Also, the traders are not as active as they were in 2017 and early 2018, whereby some Exchanges come through liquidity problems in the dust. The vigorous action taken by governments and regulators in connection with the bear market is forcing some exchanges to either restructure or even completely shut down their businesses.
Binance, Kraken, and BitMEX
There have recently been rumors of the possible closure of Binance, Kraken, and BitMEX. The three mentioned are popular and well-established crypto-exchanges. While it is true that companies faced some problems, they were able to solve them for the time being through measures such as restructuring, etc. For example, Kraken announced on September 7, 2018, that they would lay off 57 people. Shortly thereafter began speculation on the Internet, about security problems and a possible shutdown of Kraken. Later, the company made it clear that there were no security issues or plans for decommissioning, and dismissals were just cost-cutting. The SEC and the CTFC announced that they would be the securities broker 1Broker for violating federal law, in connection with securities swap transactions, that are funded by Bitcoin. Finally, 1Broker was taken offline and many customers of Binance and BitMEX worried about whether the same thing would happen to the two exchanges. Because of this potential complication, companies began denying Americans access to their services.
The Indian government, together with RBI (Indian Central Bank), imposed a crypto ban on both companies and individuals. With banks banned from doing business with crypto-currency companies, India’s largest crypto-exchange, Zebpay, also had to cease operations for the time being. In a statement dated 28.09.2018, Zebpay wrote:
“Today (28.09.2018 at 16.00) we will cancel all unexecuted Crypto-to-Crypto transactions and will credit the assets back to the Zebpay Wallet. For the time being, no new order orders will be accepted.”
Zebpay, however, did not stop the operation and is currently working on new opportunities to go live again.
Liqui, a Ukraine-based crypto exchange, said in a statement on January 28 that they are no longer able to offer their services to their clients. In the past, there was some controversy about the Exchange. Liqui blamed the bear market and the resulting liquidity problems for the temporary cessation of business. The lack of liquidity comes from the fact that many investors who entered the crypto market at the peak left the market. Since few investors and traders want to trade on small exchanges with little volume, they make way for large crypto exchanges like Binance and Kraken. Liqui plans to re-enter the crypto world after solving these problems.
In times of crypto Bull Run in 2017, many new exchanges started. To keep an exchange running despite a bear market and the liquidity problems, only very few survive. Judging from the current market situation, many exchanges will not survive the ongoing crisis. The exchanges play a central role in the crypto-ecosystem. Anyone with a cryptocurrency can swap them for fiat money on the crypto exchanges and thus indirectly buy all the world’s goods. Since most shops currently do not accept cryptocurrencies as a means of payment, the Exchanges, up to the complete mainstream adaptation, are very important.
Author: Marko Vidrih
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