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Cryptocurrency exchanges quitting left, right, and center amidst market crisis

Crypto market crash buries at least 25 crypto exchanges in the last month.

The market crash that occurred in May, has had catastrophic repercussions and results for the crypto sphere. The major issue with the market crash is that, it has been prolonged for way to long and the implosion doesn’t seem to be stopping any time soon. Leading crypto exchanges such as Block Fi, Three Arrows, Voyager, Coinbase are facing the blunt of the market. It is observed that, many of these cryptocurrency exchanges have resorted to either freezing the customer accounts or to lay-off some percentage of work force, to stay viable and functionable in the current market situation.

Globally, there were 500 cryptocurrency exchanges as of July 6, a decrease from previous month highs. Finbold has calculated the sector has lost 25 exchanges in the last 30 days using a web archive tool, taking into account that, as of June 6, the number stood at 525, according to statistics from CoinMarketCap.

Because many companies in the field are looking to quit, the demise of crypto exchanges is correlated with the decline in value of the overall crypto market. Exchanges have been influenced by other macroeconomic factors, such as growing inflation rates that have made it difficult to sustain enterprises, in addition to the collapse of the cryptocurrency market.

 

Crypto segment restructuring itself.

Crypto sphere restructuring

Credits: RSM Global

The institutions dealing in crypto currency are considering restructuring of their business models to be operational under the current market situations. Bitcoin’s fall was one of the major reasons for the prolonged market slump and also had a direct relationship with the slump in stock markets, particularly in technology sector. The market crisis was largely deepened due to Terra’s UST’s and its sister token Luna’s crash, an aspect that went on to erode the trust in the sector.

Crypto crash has hit hard the small-scale cryptocurrencies.

Notably, smaller exchanges are probably most affected because some investors have chosen to take advantage of trade activity and HODL their assets in anticipation of the next market upswing. Additionally, retail investors had to leave the market when the bear market got worse.

As the cryptocurrency exchanges are exiting the industry, the responsibility of regulatory bodies is increasing rapidly. The regulatory bodies have to enact strict laws to protect the investments of the investors. Factually, the cryptocurrencies that fail and quit, also fail to share the investor’s deposits and as such instances are growing in the industry, the trust among the investors is decreasing rapidly and sooner or later, the market will loose thousands of investors due to lack of trust.

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