PRESS RELEASE. November 2021, the leading Crypto services comparison site – Cryptowisser, announces its annual Crypto exchange graveyard. The list is the only extensive database in existence for “dead” cryptocurrency exchanges. Over the past year, many exchanges have fallen victim to regulations, hacking, and a highly competitive growing market. Six exchanges from the detailed report were even closed because the actual exchange was a scam.
It’s been another tough year for crypto exchanges as nearly 80 exchanges have bitten the dust, but why more exchanges are dying despite the boom in the crypto market and continued acceptance in the mainstream economy ?
The regulatory kiss of death
As the market grows and crypto becomes more widely accepted, nations and governments are forced to bend the knee to find ways to accept cryptocurrency and with that comes regulations. Whether said government enforces stricter regulations or bans crypto altogether, there are several potential factors that can affect trading with the markets in these countries. For example, with the recent crypto ban in China, major exchanges like Bit-Z have fallen apart.
The death penalty by piracy
While one of the list’s smallest contributors to death, hacking shouldn’t be ignored. There were reportedly 3 fatal hacks reported last year. The Atomars Stock Exchange, a promising Seychelles stock exchange known for its security, was the victim of an inside job that resulted in a hack, and has since failed to rebound since.
The powerful mower
Despite the growing number of crypto users, smaller exchanges are struggling to compete with giants such as Binance and KuCoin. These familiar crypto names continue to swallow most of the new user market share as well as trading volume, making it very difficult for smaller exchanges to compete. Just looking at the native coins of these giants, it is obvious that they are experiencing massive growth and taking market share. Binance’s native token (BNB) was worth $ 27 a year ago and is currently valued at $ 628. KuCoin has seen even greater growth with its native token, with the KuCoin token worth just 85 cents a year ago and now worth over $ 21.
The death experience challenge
Decentralized exchanges have been pushing centralized exchanges for some time. They often have lower fees, fewer KYC requirements, and higher security, making them an attractive choice for many traders. When you look at major DeFi exchanges like Uniswap, they show huge signs of growth. – Just a year ago, their token market capitalization was nearly $ 900 million, and today stands at $ 15 billion.
Deaths on exchanges are increasing year by year, but with more regulatory sanctions and crypto awareness around the world, you could argue that regulation could stabilize the number of crypto exchanges in the market. The days are far from the opening trade in a Bull-run hoping for the best. In order for a new exchange to thrive, it will need to comply with all regulatory requirements, be able to cover all associated costs and also have a competitive advantage not only with the big names who already offer trust, security and acceptable fees, but also with decentralized exchanges which monopolize market share and users every day.
Cryptowisser is a cryptocurrency service comparison site with the world’s largest, most frequently updated, and trusted listings of cryptocurrency, wallet, debit card, and merchant exchanges. With over 1,000 reviews of various exchanges, debit cards, wallets, and traders, they help you make all of your buying decisions and service choices in the crypto world.
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