The crypto exchange industry is saturated - Agree or disagree?

[Indamuck]

I agree with you. I trust multiple stock exchanges and are trading only on them. I do not understand why we need such a large number of exchanges, because it is really inconvenient.

We need to have a large number of exchanges because that will help us to get more profit from crypto. But that is only for people who have good skills in arbitrage trading, and he can use the chance to buy low in one exchange and send it to another exchange which has a high price. That will be making another profit as we know that the price in many exchanges will not be the same. But still, there is a risk that we need to pay, especially if we are missing the time in the transaction.

Arbitrage isn't really worth it, by the time you get your funds transferred over it is already too late.  Arbitrage is good for selling physical goods in different markets but not so much for crypto trading.  Plus a lot of orders on exchanges are completely fake.

[The Sceptical Chymist]

I just don't understand why are they still making their own despite they know that they can't topple Binance? Hoping to make a lot of money from listing and trading fees? IEO launchpads?

I don't know either, but at this point I don't think any new exchange that pops up is going to put Binance (or Poloniex or Coinbase) out of business or even take much of their business away from them.  Binance and the others I named are established exchanges and, all things considered in this crazy world of crypto, are the most trusted.  So yeah, the new ones are just hoping to make money (duh) but I don't expect any of them to survive long-term and wouldn't trust them not to eventually pull a "we got hacked!" exit scam.

How many exchanges are there, anyway?  I've only used a handful and haven't really sought out any others.

Also, I've said this before: I expect that in about 5 years or so, the crypto exchange space is going to be severely consolidated, and there will probably be only 3-5 exchanges around, and they'll all be regulated by governments and will probably be more trustworthy than the ones around right now.  If an exchange like Binance had enough capital, I would expect them to perhaps try to buy out some of their competitors--sort of like what's happening in the US in the pharmacy business.  Walgreens is buying Rite Aid, and Rite Aid had already bought out Brooks Pharmacy, and CVS and Walgreens have already bought out most of the independent pharmacies in the country.  That's just what happens in business.

[gentlemand]

Also, I've said this before: I expect that in about 5 years or so, the crypto exchange space is going to be severely consolidated, and there will probably be only 3-5 exchanges around, and they'll all be regulated by governments and will probably be more trustworthy than the ones around right now.

There'll be more shitcoins than ever by then and the heavyweight exchanges will be far more discerning than they are now. I'm pretty shocked at the junk they're still willing to list.

Because of that there'll be a truly vast subsect of shitcoin exchanges for people to drown in all the shit they could ever want.

[Ucy]

Well, investors think the exchanges are making a lot of money.
If we agree that competition is a good thing, why not let come in and compete with other exchanges. I guess the ones with usefull products will be at the top

[raven7886]

There is a lot of exchanges but the bad part is there is not enough competition. I mean there are some small exchanges that make their money from adding obscure coins that nobody except that community wants to trade and they have like 5 thousand dollar volume total but hey that makes them another 50 bucks so they add it anyway, add 100 coins like that and you get 5 grand per day.

Look at all the top exchanges and difference between them and the small ones are huge so there is no real competition, you are either in the top 5 or you are a small exchange no matter what. Instead of starting more exchanges maybe people should try to focus on acquiring companies.

A small company could acquire a smaller exchange and then combine the powers together, then it can buy another small exchange with the money it makes and continues to grow like that and become one of the big exchanges, until that happens another new exchange means nothing.

[deisik]

It is like the law of diminishing returns

If you are looking for something really unique, the fact that it hasn't been implemented yet pretty much proves that your effort may not be worth the while (and money) put into it. Okay, you add some fancy feature (like currency swaps or whatever) and how many people are actually going to use it? In other words, you would get better returns for a buck invested if you just make everything better and smoother - user experience and things like this (e.g. faster withdrawals and deposits, more complete and elaborate api, etc). As I'm inclined to think, that's where improvements should be made if you want to beat the competition

I currently think that these are investments with long-term returns. You mention the swap, I agree at the moment but in 5 years?

Bitcoin futures have been around for a couple of years already

And I can't say they are wildly popular presently. Indeed, if major derivatives exchanges massively weigh in (couple that with a more benign attitude toward crypto from the regulating bodies like the infamous SEC), this may change a lot. In fact, it may change everything. But if nothing is set to change in this department in 5 years time, Bitcoin derivatives are not going to become any more popular than they are now

In the short term, as improving the user experience yes I fully agree. Then they may have also other priorities such as security or compliance, and also their partnership, with banks or others. idk. In general, this is where the weaknesses are regarding exchanges

That's my point. Crypto exchanges are a hell to withdraw to fiat in general. Bitfinex and its fiat adventures speak louder than a thousand words

[Mahanton]

In my opinion, there's no way that these new exchanges would surpass the big players in the market.

How would you able to describe on how that new Binance exchange in the past did able to take the top spot as of this moment?
You cant conclude that new exchange doesn't have the chance because if people would able to see new exchange possible unique feature and good
service then there would always be a tendency.

Do you guys agree that making our own crypto exchange isn't worth it anymore in today's market situation? Is it really saturated now?

It depends because business do involves with success and failure.It do just matter on how you do handle it.

[LeGaulois]

Okay, that's right. But if Futures have never been popular it is because the majority of investors were waiting, and still are, for more regulations and a clearer framework, I suppose. It's also funny but the volatility of BTC has been the most used criticism and since Futures are exactly for this...

[dothebeats]

It is better for the market to be that way so as to avoid manipulation since different platforms have different and independent market movement from one another. Also, this lessens the risk of a lot of users losing funds in an event of a hack. Imagine if a single exchange were to lose a ton of its holdings in a single sweep, the users would be the ones who would suffer the consequences. Even if new exchanges popping out are offering no new features at all, they at least help spread the coins out there, so it's definitely okay too, provided that these exchanges abide by the laws in order to not pull off exit scams easily.

[RealMalatesta]

I agree with you. I trust multiple stock exchanges and are trading only on them. I do not understand why we need such a large number of exchanges, because it is really inconvenient.

Inconvenient ? Why ?  Have you try using them ?  Imo its not a bad idea to have different exchanges so that we traders can choose if what suites them  .  some traders dont stick on a single exchange but they love to buy and sell on different exchanges so that they can earn some profit because every other exchange have different price list  .

That does now not mean that the number of exchanges should be more than the number of traders themselves, how many people do we have in this trading market now that everyone wants to open exchange?That is why majority of the new ones end up not getting volumes because there are no plenty new investors.

The new investors we have would rather stick with a well-known exchanges while the existing investors will have no reason to swap to a new one, so I see all these companies trying to also go the line of exchanges wasting their time because we already have enough at hand.

[Kiweikoo]

But it is entirely possible that some new small exchange will grow and outperform the large ones

Possible but not very likely overall

Less than two years ago Binance didn't exist. Now people have 'Binance' tattooed on their scrotum and name their children after it. The CEO does of course have track record but it was still brand new.

Once upon Poloniex lorded over everything. Now its owners sit crying in its empty offices.

I wouldn't underestimate how ephemeral tastes can be.

Exactly as you said, binance from an exchange with very low reputation has started to rise over time and become the number one exchange in the present time, poloniex as a prestigious and powerful exchange in the past, it only has the outer shell in this period, everyone has abandoned it soon. And these events have proven that the exchange industry is still highly developed and competitive every day because we should know that the number of users will increase over time and the profits that exchanges can earn are immense, there is no saturation here

You have made a point here and that is the trait of the best option in the market usually. Binance grew from one user to having more than 90% of the crypto users now and the credit goes to the management and the services it has been offering. Actually they never compromised on quality and behind Binance, is the brain of Changpeng Zhao.

[rosezionjohn]

It's not saturated. Let them battle it out. You cannot be 100% certain that Binance will remain the top exchange in the next 10 years.

Years ago, I never thought Poloniex would be displaced by Bittrex. This is just proof that anything can happen. You never know.

[deisik]

Also, I've said this before: I expect that in about 5 years or so, the crypto exchange space is going to be severely consolidated, and there will probably be only 3-5 exchanges around, and they'll all be regulated by governments and will probably be more trustworthy than the ones around right now

That's unlikely

If we take a look at regular exchanges (even just currency ones), there are a lot more exchanges across the world than half a dozen. In fact, every self-respecting country has a currency exchange, either a separate one or as a trading floor at a bigger one. People will always want to convert crypto to local currencies and thus there will always be demand for local crypto exchanges making this option available. In a sense, we should expect more exchanges to appear if crypto gets universally regulated in 5 years

It's also funny but the volatility of BTC has been the most used criticism and since Futures are exactly for this

It is not the volatility itself which is the object of so much criticism but rather the market rigging and manipulation that are leading to it and the cause of it

[prtty2gal2]

It's not saturated. Let them battle it out. You cannot be 100% certain that Binance will remain the top exchange in the next 10 years.

Years ago, I never thought Poloniex would be displaced by Bittrex. This is just proof that anything can happen. You never know.

So battling it out means we should all tart establishing all manner of exchanges that will make the exchanges becomes more than the market itself? It is this battling out idea that made poloenix lost. When Poloenix was reigning, there were little exchanges around to battle it with them, and until we started having too many exchanges that took their users that they became weak until Bittrex and binance came to topple.

So I think the exchange market is too saturated for now and we really need to see less exchange, if it is not saturated, why are we having people separating good exchanges to bad ones.