Experts: Many Small Cryptocurrency Exchanges To Go Out Of Business Soon

Experts: Many Small Cryptocurrency Exchanges To Go Out Of Business Soon
Advertisement

Experts and analyst in the crypto industry have predicted a widespread shutdown of small exchange platforms because of their inability to attract investors. A report released by 8BTC.com, a blockchain news platform operating in China, indicated that the first 14 major crypto exchanges take up about 73% of the total value of transactions made in the market, with the rest of the 170 small exchanges accounting for only 27%. This presents a huge hurdle for the small, ambitious crypto exchanges to maintain a profitable market share and scale up their operations.

Security Fears

Besides this stiff competition, the crypto world as a whole faces issues related to fraud and security. It’s only a week ago that Cattleex, a crypto trading platform, went bankrupt after failing to meet market demands by its miners.
Bithumb Exchange, another South Korean platform, also lost money in a hack that culminated in its temporary suspension of all deposit and withdrawal services on its platform. Youbit Exchange, also based in South Korea, declared the failure of its project after it was hacked.
Despite the central bank of China banning initial coin offerings (ICOs) and crypto exchanges, many Chinese startups are registering their exchanges outside China and targeting Chinese investors. The many cases of fraud in the Chinese crypto world haven’t helped the situation.
Just recently, 86bex, a crypto exchange platform started and registered by a Chinese team in Singapore, went under after recording major losses. 86bex went out of business after operating for just a week.

No Way To File Complaints

Explaining how the fraud might have happened, Hong Shumin, who works as the director at Gingkoo Blockchain Institute, narrated that 86bex’s first goal was to attract many investors to its platform by sharing its registration tokens on social media.
After investors committed their money in the venture, the fraudsters vanished, deleting all their contact details – which made it hard for investors to file any complaints against them.
Qi Aimin, who is the director at Southern China Blockchain & Big Data Rule of Law Research Institute, took issue with the current saturation of crypto exchanges in the market as well as the everyday influx of new entrants, saying that most of these small platforms lack the necessary expertise, technical skills, brand value, and a community base, making it hard for them to penetrate the market. This is made is worse by the major exchanges that have totally dominated the crypto trade volume.

What's Your Thought On This?, Let Us Know In the Comment Section Below.

Get Daily Crypto News On Facebook | Twitter | Telegram | Instagram