Two Reasons Why Crypto Won’t See Exchange Consolidation: Trader

It seems like every new month a new exchange opens its doors and is featured in the cryptocurrency news. Over the past year, there have been a lot of cases like these. However, according to one trader, there are two reasons why crypto won’t see the consolidation it deserves across exchanges.

If we go with the examples, it is enough to note that a number of new crypto marketplaces and derivatives players such as CoinFLEX and AAX have opened their doors. In the last few months alone, data from The Block shows that legitimate trading volumes on spot crypto exchanges is down by more than 50% since June this year.

The two reasons why crypto won’t see exchange consolidation, according to Max Boonen who is the COO of over-the-counter trading firm B2C2, are the fact that the 2017 boom provided exchanges with a solid boost to stay in business – and in that the market structure of crypto will look like FX with a lot of brokers to choose from.

“I mean, Kraken and Coinbase all of those guys are doing healthy volumes and some of them managed to have a somewhat captive user-base,” he said.
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Boonen also added that newcomers offering new kinds of user experience have also seen a significant growth.

“And you see that with a lot of the newcomers, right? Binance. Incredible success story. How long did it take for Binance to really take off? Less than six months. There’s a few new exchanges, CoinFlex, FTX, those guys in a few months have really taken market share.”

The trader thinks there are two reasons why crypto will look like FX and there will be a lot of competition to choose from.

“You know, you have dozens of FX Brokers that you can pick from, obviously some bigger than others. But it’s possible that we’re just never going to have consolidation or it’s going to be at the margin. It’s not necessarily going to be, you know, exchanges dying left and right.”

The total market cap as we speak is at $194 billion – below the $200 billion mark and still vulnerable following the dips from this morning.