Be careful. Now, when trading volume has fallen off, is when exchanges can start to fail. Already two have frozen withdrawals, another collapsed and several other lose a huge customer base in the US. And a number of exchanges are showing clear signs of st

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https://preview.redd.it/0plrhcbuj74b1.png?624&format=png&auto=webp&s=952fec461cdfb6ff09dd1c3d1e0bdcd4bda31d8f

This chart shows Bitcoin trading volume for the past 3 years and the current lows of trading volume are clearly visible. Volume is even lower than during pre-FTX 2022 when exchanges and platforms were freeing withdrawals and falling left and right. It is fairly obvious why this is bad for exchanges as less trading means less fees, that account for the majority of exchange revenue. This tends to put a lot of stress on exchanges and you see it in the promotions offered by them. For instance, FTX ran more than double the amount of trading competition promotions they did in the prior year than they did in the 10 months running up to their collapse in an effort to encouraging trading. Let’s go through the activities stressed exchanges are doing to encourage trading. As some examples:

• MEXC recently has dropped both their spot maker and taker fees to 0%. Futures maker fees are also 0% and futures taker fees are dropped to 0.01%. Now, they only make money off futures takers trades and withdrawal fees. This is in addition to the MANY promotion/trading competition emails they send)

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MEXC

• Gate.io dropped spot trading maker fees and fiat currency trading fees to 0 with 0% maker and taker fees on BTC-margined futures.

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Gate.io

• Binance have ramped up activity on their launchpad pushing a lot more new projects. They also have quite infamously listed useless tokens of PEPE and FLOKI. It was quite atypical for them to list such a ew (and useless) token in PEPE and you should also question why they only now decided to list FLOKI as well. Bianance is also still running their BTC zero-fee promotion of the TUSD quoted pair.

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Remember, things must be pretty extreme for exchange to choose to take ZERO fees for the majority of their products. If people are buying, there'd be no need to drop fees to encourage more trading.

A number of exchanges/platforms have also lost access to US markets as platforms like Binance and Nexo have left Canada, due to new regulations. Bittrex, Nexo and MEXC had already closed doors to US customers, while others in the US face uncertainty. Coinbase is the most prominent, has been forced to stop its lending product as well as many Cefi staking service providers have been forced to stop its lending product and Binance’s BUSD is a dying coin as their issuer Paxos was ordered to stop minting. All of this obvious take it hit to revenue.

Now the dominoes have already begun to fall. Hotbit, an exchange that serviced over 1 million people, has shut down very recently and BKEX, one servicing over 8 million, has frozen all customer withdrawals for some shady reasons that they claim to be aiding in police investigations. Patricia, another platform that service close to 1 million has also frozen withdrawals. It’s a little weird because there were also allegations of money laundering around two of them, and allegations of a hack involved in another but the reality is that exchanges are always dealing with money laundering accusations(because of the anonymity of crypto) and investigations and there are always hacks occurring under the radar. But make no mistake that anytime trade volume is low, fees are low, so revenue is low and that’s prime time for a crash. Just remember that it’s not your keys.