The crypto exchange industry is saturated - Agree or disagree?

[LeGaulois]

To cope with exchanges such as binance, you need to have a lot of money to start with. Not all exchanges are interested in becoming as big as those currently in the top. And to reach the top, the idea must be more than original and offer an attractive product to attract people.
It's possible to see a new corner on the top in the future, it could be a  company already established with resources (ie banks)

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[el kaka22]

I think we do need that saturated market for the future, I have lived in a not saturated exchange world and its not as sunshines and rainbows like you imagine. When I first started there was not that many places you can buy and sell altcoins, most of the places were usually fiat to bitcoin or bitcoin to fiat which meant that altcoins were a second citizen. Then cryptsy came up and poloniex and bittrex, these are very old but bittrex was not used too much at all and poloniex had very little amount of coins in it. Cryptsy was the place everyone loved and used, like today's binance but back in the day when we had fewer people.

When cryptsy got "hacked" and closed we were left with just two exchanges and a lot of coins missing. Today even if binance is closed we can find a way to comeback much better thanks to all other exchanges.

[7788bitcoin]

As what I have seen in the crypto market nowadays, new exchanges keep emerging. But why?

Is it because they want to compete with Binance, Okex, KuCoin, etc., and believe that they would surpass them?

In my opinion, there's no way that these new exchanges would surpass the big players in the market. Thus, it's already saturated no matter what "magic" or unique feature that they had.

The main reason for more exchanges keep emerging is simply because the amount of profit they could make building a decent profit and majority of them are not having any license to run these exchanges and it is easiest way to make money with the amount of trades being carried out in several exchanges and they commission they earn with every trade, if you have the basic coding skills to create a decent UI you will get users to trade and that is why you see many exchanges coming up, people should understand what their security features are before trading and we all know how these exchanges are under attack all the time from hackers, so exchanges without good security features will get hacked, so be cautious where you trade.

[bitbunnny]

As what I have seen in the crypto market nowadays, new exchanges keep emerging. But why?

Is it because they want to compete with Binance, Okex, KuCoin, etc., and believe that they would surpass them?

In my opinion, there's no way that these new exchanges would surpass the big players in the market. Thus, it's already saturated no matter what "magic" or unique feature that they had.

The main reason for more exchanges keep emerging is simply because the amount of profit they could make building a decent profit and majority of them are not having any license to run these exchanges and it is easiest way to make money with the amount of trades being carried out in several exchanges and they commission they earn with every trade, if you have the basic coding skills to create a decent UI you will get users to trade and that is why you see many exchanges coming up, people should understand what their security features are before trading and we all know how these exchanges are under attack all the time from hackers, so exchanges without good security features will get hacked, so be cautious where you trade.

Exactly, new exchanges appear because of profit that is still considerable. That is also the reason why are there so many scam oriented exchanges and greedy and naive users always fall for the same trick thinking every new exchange will give them opportunity for revolutionary profit.
But only few users are actually careful about legitimacy, trustworthy and security when they pick up the exchange. That is why some awareness about that should be raised and honestly new exchanges are not needed anymore.

[exstasie]

As what I have seen in the crypto market nowadays, new exchanges keep emerging. But why?

Is it because they want to compete with Binance, Okex, KuCoin, etc., and believe that they would surpass them?

Most of them are just using TradeSatoshi or similar turnkey software that allows you to create an exchange in a matter of minutes. It's become incredibly easy to make an exchange. Attracting real trading liquidity is a different matter though.

Heck, for that matter, most of OKEx's volume is fake. Hundreds of crappy exchanges inflate their volume in a pathetic attempt to attract traders. I don't think most of them believe they can compete with the likes of Binance. I think they're just trying to make a quick buck. I agree it's getting saturated.

[miropp]

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.

[Tungsten-1]

To cope with exchanges such as binance, you need to have a lot of money to start with. Not all exchanges are interested in becoming as big as those currently in the top. And to reach the top, the idea must be more than original and offer an attractive product to attract people.
It's possible to see a new corner on the top in the future, it could be a  company already established with resources (ie banks)

Any crypto exchange can do that only if they provide all the required features and tools for the users and the most important thing is its security. When recently running exchange start focusing on these points in future it can become a leading exchange. Even Binance got hacked so if another exchange with 100% comes in action then it can outdate the Binance and other leading crypto exchanges, no doubt.

[deisik]

And to reach the top, the idea must be more than original and offer an attractive product to attract people

In fact, you don't need something exceptionally original

All you have to do is offer margin trading, provided it is done in a reliable and consistent way. How many exchanges are offering this right now? I know about Bitfinex and Bitmex, though I couldn't come to understand how it works with the latter (read, it is likely something shady intended to take your money in a semi-legal way). And I'm not sure that freely available trading engines (like the ones mentioned here) offer this feature or it is actually usable

[jakezyrus]

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  .

[Kiweikoo]

As what I have seen in the crypto market nowadays, new exchanges keep emerging. But why?

Is it because they want to compete with Binance, Okex, KuCoin, etc., and believe that they would surpass them?

In my opinion, there's no way that these new exchanges would surpass the big players in the market. Thus, it's already saturated no matter what "magic" or unique feature that they had.

The main reason for more exchanges keep emerging is simply because the amount of profit they could make building a decent profit and majority of them are not having any license to run these exchanges and it is easiest way to make money with the amount of trades being carried out in several exchanges and they commission they earn with every trade, if you have the basic coding skills to create a decent UI you will get users to trade and that is why you see many exchanges coming up, people should understand what their security features are before trading and we all know how these exchanges are under attack all the time from hackers, so exchanges without good security features will get hacked, so be cautious where you trade.

If you look at the number of coins on the coin market cap site, you might not find anything more than 2200. You hardly have 2200 crypto assets in the market and majority of them are worth nothing and majority of them have no supply record. There are great funds available for investment in a digital token that can give back so the crypto market is super dilute right now.

[Al-e_x]

Yes, I agree, I also see that I think the crypto exchanger saturation is caused by a number of things, one of which is because there are many traders who are floating and cannot turn their funds on the exchanger

[LeGaulois]

And to reach the top, the idea must be more than original and offer an attractive product to attract people

In fact, you don't need something exceptionally original

All you have to do is offer margin trading, provided it is done in a reliable and consistent way. How many exchanges are offering this right now? I know about Bitfinex and Bitmex, though I couldn't come to understand how it works with the latter (read, it is likely something shady intended to take your money in a semi-legal way). And I'm not sure that freely available trading engines (like the ones mentioned here) offer this feature or it is actually usable

Right not exceptionally but I was mainly thinking about a feature that others don't have. Well like you posted and for the same reasons. Why should I use another exchange while I've already the ones I stick with. Only for something that I don't have. Me too I don't get it how it works so no use for me but if I'm correct Kraken also has it.

[deisik]

And to reach the top, the idea must be more than original and offer an attractive product to attract people

In fact, you don't need something exceptionally original

All you have to do is offer margin trading, provided it is done in a reliable and consistent way. How many exchanges are offering this right now? I know about Bitfinex and Bitmex, though I couldn't come to understand how it works with the latter (read, it is likely something shady intended to take your money in a semi-legal way). And I'm not sure that freely available trading engines (like the ones mentioned here) offer this feature or it is actually usable

Right not exceptionally but I was mainly thinking about a feature that others don't have. Well like you posted and for the same reasons. Why should I use another exchange while I've already the ones I stick with. Only for something that I don't have. Me too I don't get it how it works so no use for me but if I'm correct Kraken also has it

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

[GregH37]

Lack of vision, lack of understanding of the blockchain industry and lack of ideas is what is pushing all of them into creating exchange platform that is of no use yet to this market.

Competition? They know they cannot compete with these top exchanges that are available, they were only hoping they will get the newbies, forgetting that it is still the old users that will recommend exchanges to these newbies, and because they hear that there is so much money in exchanges.

A lot of them want to develop on already existing ideas without adding any spectacular or better functions. They also need to understand that the market will only require more exchanges when it gets bigger than this, but for the moment, the top exchange we have are more than enough to serve the current market.

[davinchi]

Why are you so confident that new exchanges can't topple Binance?  Companies don't last forever and they can easily be overtaken by newcomers.

Saturation just means more competition which should hopefully bring us better service as they all try to undercut each other for lower fees.

You mean these hungry looking exchanges will topple binance? I doubt. I am not against the opinion that there will be greater companies that may come up with better ideas that will make their system better than binance,after all binance met some exchanges on ground before topping them to become the best, but companies that will succeed in overtaking binance will be companies handling their projects with passion and not for profit alone unlike the ones we have now.

Binance Is one company I have seen that has the common characteristics with Facebook. They are both very dedicated and always go for the best, they have very great strategies which allows them plant products that will never cease to be relevant.

[LeGaulois]

And to reach the top, the idea must be more than original and offer an attractive product to attract people

In fact, you don't need something exceptionally original

All you have to do is offer margin trading, provided it is done in a reliable and consistent way. How many exchanges are offering this right now? I know about Bitfinex and Bitmex, though I couldn't come to understand how it works with the latter (read, it is likely something shady intended to take your money in a semi-legal way). And I'm not sure that freely available trading engines (like the ones mentioned here) offer this feature or it is actually usable

Right not exceptionally but I was mainly thinking about a feature that others don't have. Well like you posted and for the same reasons. Why should I use another exchange while I've already the ones I stick with. Only for something that I don't have. Me too I don't get it how it works so no use for me but if I'm correct Kraken also has it

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?
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.

At the same time at the UX level, what more is needed to add? I am not an extensive user, but for example:
*the withdrawals/deposits: you mean fiats or cryptos? Both are independent of the company. And if your withdrawal hits your bank account in 24 hours, isn't that enough?

High TXs fees for cryptos: to not get people (newbies) starting to say 'I don't get my payment from XXXX company' and all the useless support tickets opened.
High TXs fees for fiat: I'm not used but in my case, it costs me 0.09€ per bank transfer and hits my bank within 24h and often the same day.
*APIs I have no idea and no use so can't comment

[gentlemand]

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.

[SirLancelot]

And to reach the top, the idea must be more than original and offer an attractive product to attract people

In fact, you don't need something exceptionally original

All you have to do is offer margin trading, provided it is done in a reliable and consistent way. How many exchanges are offering this right now? I know about Bitfinex and Bitmex, though I couldn't come to understand how it works with the latter (read, it is likely something shady intended to take your money in a semi-legal way). And I'm not sure that freely available trading engines (like the ones mentioned here) offer this feature or it is actually usable

Right not exceptionally but I was mainly thinking about a feature that others don't have. Well like you posted and for the same reasons. Why should I use another exchange while I've already the ones I stick with. Only for something that I don't have. Me too I don't get it how it works so no use for me but if I'm correct Kraken also has it.

To be honest, the crypto market is not going to be a little saturated even in the nest decade. This is like any other market and you still just 2200 coins out there and some projects going on. I believe that this dilute market will move towards a saturated market in future when there would be so much coins and so many good options for investment. The fake or impotent coins are not worth investing and you could easily exclude them.

[geegaw]

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

[ethereumhunter]

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.