Crypto exchanges that ravaged an era are slowly closing, could the era of the old ones be over?
Many exchanges that marked a time in crypto history began to close. Many events continue to surprise former investors, such as Bittrex’s filing for bankruptcy and Hotbit’s announcement that it will cease operations. Is it a sign that an era has come to an end, with crypto exchanges disappearing one by one? In this article, we discussed how these exchanges came to such a position over time.
Endless Editorial Pressures
The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and many regulators continue to dominate crypto companies. In particular, the SEC’s litigation with many crypto exchanges has taken the crypto industry under its spell.
Although many crypto exchanges were affected by the SEC’s stance, the clearest development was on the side of Bittrex. Bittrex, which started operating in 2013, is one of the crypto exchanges that former investors remember most clearly. While there were very few cryptocurrencies on the market at the time, the majority of crypto trading revolved around exchanges like Bittrex and Hotbit.
In the past weeks, Bittrex has been in the grip of the SEC. The SEC accused Bittrex and the exchange’s former CEO, William Shihara, of operating an unregistered securities exchange. In a previous report, it was stated that the SEC had sent a Wells notice to Bittrex and was preparing to file a lawsuit.
On top of that, the SEC’s accusation of Bittrex Global GmbH, a branch of Bittrex, for not registering as a national stock exchange completely broke Bittrex’s resistance. Bittrex, which has gradually lost its users with such scandalous events, recently filed for Chapter 11 bankruptcy in Delaware.
Another well-established crypto exchange that was dragged into collapse due to the difficulties created by the regulators was Hotbit. In its announcement, the exchange stated that working efficiency has deteriorated since a former member of the team was subjected to an investigation in August 2022.
Hotbit, which has been in trouble with a lot of events such as investigations and lawsuits, has been struggling with various problems since August of last year. The most striking of these was that it temporarily suspended all deposit, withdrawal and trading transactions at that time.
The Hotbit team stated that centralized exchanges are getting more and more challenging and cannot meet the long-term trends. The exchange said the only option was to become more decentralized or adopt regulation. Stating that it ended its operations as of 07:00 on 22 May, Hotbit requested users to withdraw their assets before 07:00 on 21 June. Reasons for bankruptcy include cyber attacks and exploitation of project flaws by malicious users. Thus, Hotbit also touched on the issue of security.
https://twitter.com/Hotbit_news/status/1660496999458963458
They Couldn’t Keep Up With The Times
The ever-evolving crypto industry has brought many innovations with it. Today, factors such as convenience, pleasing to the eye and speed are among the most important reasons for many buildings. The small number of crypto exchanges in the previous processes forced the investor to these exchanges. But over time, the emergence of faster, more secure, eye-catching crypto exchanges has almost overtaken the old exchanges.
The old exchanges, which had difficulty in adapting to the innovation, started to lose users day by day. With the decrease in users, the revenues of the companies paved the way for the collapse. The issue of capital, which was the main source for strengthening the stock market, became increasingly difficult for the old stock exchanges. These stock markets, which could not develop due to regulatory pressures, decrease in revenues, and could not keep up with the times, were left to their fate.
New Investor Doesn’t Prefer Old Exchanges
When we look at the times when the crypto industry developed and shined the most, it seems that it was actually 2017 and beyond. Although well-established exchanges such as Bittrex and Hotbit were launched until 2017, those who managed to stay up to date and survive were able to continue on their way. The clearest example of this is Binance. Founded in 2017, Binance left all the exchanges before it in the background. This shows that the new investor is no longer interested in the old crypto exchanges, and turns to the more up-to-date, advanced, secure, fast, successful design exchanges.
The Rise of Cryptocurrencies
In periods when old exchanges were popular, the number of cryptocurrencies was incredibly low. Many cryptocurrencies were seeing huge increases in a short time, as the trade in the stock exchanges rotated among the limited cryptocurrencies. Since these increases took a very short time to reflect on other cryptocurrencies, elements such as transaction volume and commission earnings in old crypto exchanges were at the top. The increase in cryptocurrencies with each passing day was another factor that undermined this event and put the exchanges in the background.
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