Bitcoin cryptocurrency, which has fallen 16 percent after almost tripling this year, is showing signs of leaving as it attracts retail inves...
This number is declining following the increase in the number of unique addresses sending digital coins to exchanges in 2017. According to TokenAnalyst data, the number of bitcoin sending addresses to the Bitfinex trading operating system is at least two years. Meanwhile, while the number of unique password-sending addresses to Binance, the world's largest cryptocurrency exchange, also fell to its lowest level since early 2018.
According to Sid Shekhar, founder of London-based TokenAnalyst, the decline in bitcoin and other cryptocurrencies is a sign of "the general lack of interest in retail now in cryptography." "If we use the 'Bitcoin as a safe haven in a time of recession', the number of new users / buyers is actually increasing." Instead, a small group of energy investors dominate the bitcoin business and do not have enough scope to support currency growth.
According to a survey by the Inter-Walt Performance Foundation, only 11 percent of cryptocurrency holders in 2018 sent coins once or twice as a trade or payment.
Compensation for user reduction
Binance, Bitfinex and other exchanges tried to attract volume to compensate for the drop in trading volume. These strategies include taking steps to increase user loyalty, increase costs, and provide more services to increase revenue stream. Binance and Bitfinex have both expanded their offerings to include margin trading, allowing users to speculate and receive funds. After allowing traders to lend to other traders in August, Binance began testing its futures product in early September.
"The more products you offer, the more sticky your customer will be," explained Jeff Dorman, chief investment officer at Arca, a Los Angeles-based asset that invests in cryptocurrencies. "All consumers prefer a one-stop shop."
Initial offers of boom coins
Another tool in which cryptocurrency exchanges continue to operate is the facilitation of initial exchange offers (IEO). While the boom in coin offering (ICO) has long since waned, investors are now pouring money into a new way for startups to raise money with digital passwords.
Unlike ICOs, in IEOs, digital coins are sold to investors through cryptocurrency exchanges, while directly opposed by a startup. In this sense, cryptocurrencies play a similar role to an IPO investment bank, taking responsibility for investigating a potential publisher before listing it and submitting a similar report to a shorter newsletter. In return for distributing tokens to buyers, the stock exchange can receive the transaction fee after receiving the digital coin and receive the amount collected. For Binance, the amount is between 2 and 5% of the amount collected, for each Bloomberg. Despite caution among investors after the failure of many large ICOs in recent years, some believe the exchanges have an incentive to do their homework before partnering with a start-up.
"Exchange offices earn a ton of money," he said. "They have every incentive not to kill the golden goose."
What's next?
Some expect this trend to push for stronger cryptocurrency exchanges.
Ian Taylor, Head of Consulting at Galaxy Digital Holdings Ltd. "The whole exchange space is very scattered," Bloomberg quoted him as saying. "In the last 6-12 months, many exchange platforms have been launched, all offering slightly different services. What I expect to see over time is some kind of integration to boost user growth."
