Kaiko Predicts Difficult Period for Cryptocurrency Exchanges

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Digital assets data provider Kaiko has said that cryptocurrency exchanges will be tested by non-native market conditions, a decrease in client activity and problems of a number of industry participants. Some of them may go bankrupt if they are not “rescued” by firms like FTX or Alameda.

The company specialists have recalled that the symptoms of a bear market are a decrease in liquidity and a reduction in trading volumes. This situation puts pressure on the financial results of crypto platforms, which generate most of their income through commissions.

According to analysts’ calculations, in recent months there has been a decrease in bitcoin trading volumes. The exception was the May surge, which was caused by the volatility associated with the collapse of Terra.

Kaiko’s analysts have also cited the reduction in fees and the problems of additional directions (staking, venture investments) as risk factors for cryptocurrency platforms.

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