The winter has come. At least in the world of cryptocurrency. And it has shed a lot of victims, in particular among cryptocurrency exchanges.
According to information from cryptowisser.com, the company maintaining the world’s largest cryptocurrency exchange list listing more than 370 different cryptocurrency exchanges, more than 10% of all exchanges that were up and running in March 2018 have now closed down their respective operations.
It makes perfect sense though. Cryptocurrency exchanges main sources of income are trading fees, listing fees, and advertisement fees. In a bear market, less people want to trade and therefore the exchanges receive less income in trading fees. In a bear market, fewer ICO-projects are likely to succeed. As a result, fewer ICO-projects wants to list their coins/tokens at various exchanges and the exchanges receive less income in listing fees. Finally, the Google-search behaviour is also affected by the bear market. The searches for “Bitcoin” on Google dropped with more than 90% from December 2017 to December 2018. Accordingly, fewer people visit the exchange’s websites and consequently the exchanges earn less in advertising income (which is usually based on the number of impressions an advertising space receives).
So, all of the income sources for cryptocurrency exchanges get slashed in this bear market and many cryptocurrency exchanges therefore face certain death. Among the bear market’s victims, we have, inter alia: 247Exchange, Abucoins, Bitlio, Brighton Peak, Bter, Cfinex, Coinpit, CoinWinEx, EasyCoin.pl, and Magnr. But there are also many others.
The increasing competition from decentralized exchanges or other “wallet-to-wallet” trading providers has also proven to be a thorn in the side for the non-decentralized cryptocurrency exchanges out there. And they will most likely also continue to be just that.
But the good news is this. Many cryptocurrency exchanges have prepared themselves for the bear market situation and are very resilient. For a list of the world’s cryptocurrency exchanges, visit cryptowisser.com. In their major cryptocurrency exchange list, they provide an overview over all the different fees charged by the various exchanges, deposit methods, security scores, and user scores etc. A really helpful tool in the still very opaque cryptocurrency exchange environment!