The cryptocurrency market and its ecosystem have grown enormously in recent years. Rising adoption rates and the fact that there is more regulatory clarity around digital assets today has contributed to the growth of cryptography. The bitcoin today represents a robust reserve value and a cover that can diversify traditional investment portfolios. However, as crypto develops, the role of cryptocurrency exchanges cannot be overlooked.
In the final episode of the Flippening podcast , Jesse Powell, CEO of Kraken, explained the ever-changing landscape of crypto exchanges and the possibility that exchanges may see increasing consolidation. He pointed out that said consolidation and the fact that crypto-markets have reached a certain level of maturity may, in turn, imply that exchanges are likely to have similar sets of functionality. Powell said:
"I think you will see almost everyone converging on a very similar set of features. And then maybe the competition comes down to the execution and the interface, maybe even the marketing and the brand. "
While this is true for most markets and industries, it also raises the question of whether cryptography is a mature market or not. Compared to traditional financial institutions, stock exchanges offering services linked to digital assets continue to be a relatively recent phenomenon. Consolidation in terms of scaling and similar feature sets between exchanges is likely to have a negative impact on users as competition between exchanges decreases.
Source: Glassnode
According to Glassnode, in the past 6 months, there has been a steady increase in Bitcoin withdrawals from crypto exchanges, a sign that reflects not only market sentiment, but also what users think of the exchanges. However, he stressed that the movement between the continuous cryptography exchange to be a fairly inexpensive act and many users have a tendency to do according to their needs.
“But with cryptography, the switching cost is super low. So I don't think the consumer is retail - they're not deep into cryptography, they just wanted to buy Bitcoin and hang on to it. "
Powell went on to say that when it comes to competition between exchanges, there is still a significant advantage for exchanges who are the first to list new parts that are on the market.
Source: skew
Interestingly, Bitcoin continuing to fight the $ 9,300 level with its price stuck in a sideways movement for a while, the BTC derivatives market took a hit. According to market data provided by Skew, on the stock exchanges over the past 3 months, there has been a drastic drop in daily volumes of BTC Futures, a development which may imply difficult times for trading.
