Cryptocurrency meltdown

Good news: This isn’t another story about AI. Bad news: It’s about cryptocurrency, and the moon we were all told we’d go to is hiding behind a cloud.

From exchanges to trading, all the way to NFTs and gaming, several cryptocurrency companies over the last year have shuttered operations, according to RootData, a crypto asset tracking platform. Among the companies most impacted are the centralized exchanges—the intermediary digital marketplaces where users can buy, sell, and trade traditional and digital assets.

Just in the past 10 days or so, both BitMart and BitMEX announced they were shutting their operations. BitMEX announced on July 23 that after an 11-year operating history it would cease all operations on September 23. “At its peak in 2018–2019, the exchange commanded over 50% of the entire cryptocurrency derivatives market,” Crypto Briefing reported.

Crypto exchange BitMart, which had its own token, said on July 26 that it would be winding down its trading platform “after a careful evaluation of the company’s operating conditions, market environment, and future strategic direction.” The platform will shut down in January 2027, but all trading services will stop on August 26.

Jason Fernandes, co-founder of web3 investment platform AdLunam, told CoinDesk recently that “there isn’t enough volume or retail trading anymore” for these crypto exchanges.

“We are going to see a lot more of these closures announcements. I think the only exchanges that will survive are those not dependent on retail trading to be successful. In the short term, I don’t see a return for retail trading in the numbers we used to see in 2021,” Fernandes added.

The Bitcoin Foundation post on RootData said many crypto projects are dying this year due to “a series of structural issues for the technology industry, such as higher scrutiny from financial markets, stagnation of user growth, and increased competition, resulting in closures of companies that have raised large funding.”

Some of that competition includes traditional Wall Street players. CME Group, for example, has 24-hour crypto futures and options trading, and institutional investors now account for a large percentage of crypto trading, according to a recent report by market maker Wintermute.

“The divide that once separated crypto from traditional finance is no longer as clear as it once was,” Bloomberg reported.