Cryptowisser Report Shows Crypto Exchanges That Died in 2020

Cryptowisser

Cryptowisser, top crypto service comparison site unveil its Crypto exchange graveyard. The detailed report lists and explains the many crypto exchanges that have been out of operation, not functional or entirely collapsed this year, giving an detailed report into the volatile and competitive crypto exchange industry.

There was a 56% increase of dead crypto exchanges from last year with no signs of letting up. While the general crypto industry continues to see impressive growth, the crypto exchange industry is challenged with competition, saturation and forever increasing regulations.

According to their report, crypto exchanges “die” due to voluntary shut down, hacking, scams, and being shut down by the government. While the scams and hacking are self- explanatory- the voluntary and government shutdowns as well as the mystery disappearances can be explained.

Cryptowisser explains that there are primarily three groups of competitors responsible for the demise of the centralized crypto exchanges: decentralized exchanges, derivatives exchanges and non-crypto alternatives.

DEXs typically have servers spread out across the globe, making them less susceptible to hacker attacks, and they typically also offer lower fees (sometimes zero fees). They are able to handle more trading volume and are often more attractive than centralized crypto exchanges.

Another group of exchanges that have seen impressive growth are derivatives exchanges. A derivative is an instrument priced based on the value of another asset (normally stocks, bonds, commodities etc). In the cryptocurrency world, derivatives derive its values from the prices of specific cryptocurrencies, most often Bitcoin.

It is clear that derivatives exchanges are becoming stronger and stronger in the market, not unlikely to the detriment of certain centralized exchanges. Visit the world’s largest derivatives exchange list to see which derivatives exchanges you have already heard of.

Non-Crypto Alternatives become more available.

With cryptocurrencies becoming more and more user friendly and less exclusively for tech savvy trades, non crypto alternatives are also growing.

While there is currently no conclusive data showing how many users that centralized exchanges lose to these non-crypto alternatives, it is reasonable to believe that they are – at least to some extent – a contributing factor to the mass death of centralized exchanges.

Regulations make it impossible for new Exchanges to survive.

As the industry grows, so does the need to regulate it.

A Dutch exchange called NLexch, had to close down just a few weeks ago (1 September 2020) and gave the following well-written explanation to why:

“De Nederlandsche Bank [NB: The Central Bank in the Netherlands] demanded that every cryptocurrency business should register with them. The registration is deemed to be mandatory, and businesses that fail to comply will be forced to close down operations in the country. The fees charged in the whole process are very high. The cost of providing the required level of security, support and technology is not economically feasible on our own.”

NLexch will not be alone, as the bigger more established companies make it harder for new exchanges to compete.

For a new centralized exchange to flourish, it will likely need to have some form of unique edge that is not already on the market today. The days of launching an exchange and hoping for a bull-run are over, and have been for some time.

Cryptowisser is a cryptocurrency services comparison site with the world’s largest, most frequently updated and most trusted lists of cryptocurrency exchanges, wallets, debit cards and merchants. With more than 1,000 reviews of the various exchanges, debit cards, wallets and merchants, they help you make all of your purchasing decisions and service choices in the crypto world.

This article is sourced from:https://news.bitcoin.com