Some crypto exchanges are shutting down, should bitcoin holders be worried?

[Z-tight]

Z-tight's wind-down versus collapse distinction is the one doing the real work in this thread, and it has a corollary: an orderly wind-down is the good outcome, and you only get it when the business itself decides to quit. BitMart's own notice gives users until January 31, 2027.

That's about right, but a service can decide to quit, announce an orderly wind-down and do the exact opposite, which is sadly what Bitmart is doing right now. Coming back this thread, i see that a lot of people aren't updated on Bitmart's wind-down so far, they all read what the exchange wrote as they were shutting down and went away with, though you can't blame them for that.

Bitmart's notice to their users is useless right now, because they have blocked withdrawals for no reason and they continue asking their users to be patient, without providing any reason why withdrawals keep failing. It is a circus at this point, and the end is uncertain.

[nikola22]

Exchanges are not the best options for long term holding, especially these low tier exchanges. I would not choose them for spot trading. Binance and Coinbase are better options in my sight due to their regulatory and reserves status. First choice is Coinbase.

But you should not even choose CEXs for holding purposes. Always choose self custodial wallets or buy some HW like Trezor, etc.

Because the recent issue with BitMart, where they have halted the withdrawals after announcing their closure, raised serious problems for the victims. They are filing cases against the founder, etc.

Maybe they will get their funds back. I have not followed the news for the last week now, but this is proof that we should not hold funds on a single exchange, and not for the long term.

apparently, users have begun to realize that holding crypto assets on small exchanges is dangerous and started gradually switching to either larger exchanges or non-custodial/hardware storage. this has led to a wave of closures of these platforms as they cannot work properly without liquidity and users. this is likely a kind of evolution of the crypto industry.

[Audrey Simmons]

apparently, users have begun to realize that holding crypto assets on small exchanges is dangerous and started gradually switching to either larger exchanges or non-custodial/hardware storage. this has led to a wave of closures of these platforms as they cannot work properly without liquidity and users. this is likely a kind of evolution of the crypto industry.

Are the big exchanges free from scams? Both the big and small exchanges are not trustworthy to hold your Bitcoin.

You can get lists of top crypto exchanges that became vulnerable to attacks  - https://bitcointalk.org/index.php?topic=5591547.msg67054620#msg67054620

Prioritize self-custody at all costs, trade using exchanges, and hold only using non-custodial wallets.

[SilverCryptoBullet]

Are the big exchanges free from scams? Both the big and small exchanges are not trustworthy to hold your Bitcoin.

You can get lists of top crypto exchanges that became vulnerable to attacks  - https://bitcointalk.org/index.php?topic=5591547.msg67054620#msg67054620

Prioritize self-custody at all costs, trade using exchanges, and hold only using non-custodial wallets.

If you want to find an example about big exchange's scam, it's FTX exchange. Sam Bankman-Fried and his inner team did many shady and risky things while customers did not know about these things. Until Changpeng Zao tweeted about that and sold Binance holding of FTT tokens, which triggered a very quick collapse and bankruptcy of FTX exchange within a week.
What went wrong with FTX.
FTX collapse: a timeline of how the crypto giant imploded.
The bankruptcy of FTX.

However, FTX is not the only scam exchange, and there are many exchanges died in history by many different reasons.
The cryptocurrency exchange graveyard (Rest in Peace).

[ArabBTC]

Well i know that once you store your bitcoin in a non-custodial wallets that it is safe since you will be in full control of the private keys/security but can we really rule out the fact that if most crypto exchanges shut down especially the major top 10 exchanges for example that bitcoin holders won’t be a bit worried? I don’t think so because this exchanges play a major role in crypto transactions, i might be wrong and i stand to be corrected but i just feel that their is a possibility that if certain crypto exchanges shutdown that it can pose some fluctuations in the market which might be of a concern or worry to certain bitcoin holders. Some bitcoin holders might be curious and anxious to know the reason why this exchanges are shutting down knowing fully well that this exchanges have been functional for quite a period of time and this might create some form of unrest.

[Catenaccio]

Well i know that once you store your bitcoin in a non-custodial wallets that it is safe since you will be in full control of the pass keys/security

Technically, you must use correct words like it's private keys, not pass keys, not passwords.

but can we really rule out the fact that if most crypto exchanges shut down especially the major top 10 exchanges for example that bitcoin holders won’t be a bit worried?

Centralized exchanges created, closed or died with time and from big exchanges to small exchanges, they will close their services some day in different ways. If they close their services while publicly announce about their service closure and give users enough time to withdraw fund as well as proceed all withdrawals for users, there will be no negative effects. Such closures are normal and smooth ones, while if exchanges closed their services and caused losses to users, there would be a lot of negative news and panic in cryptocurrency market in general.

With people who have cryptocurrencies, what are most important with them is their funds. If they can secure their funds, they will not lose anything if a centralized exchange closed.

[m2017]

Well i know that once you store your bitcoin in a non-custodial wallets that it is safe since you will be in full control of the pass keys/security

Tell Coldcard owners about this.

but can we really rule out the fact that if most crypto exchanges shut down especially the major top 10 exchanges for example that bitcoin holders won’t be a bit worried?

This should only raise questions for those who keep their assets on such platforms for extended periods.

Despite the closure of some exchanges, there are still plenty of exchanges in the industry that continue to operate.

I don’t think so because this exchanges play a major role in crypto transactions,

Unfortunately, that is the case. Exchange services have inserted themselves into the P2P space, becoming the very middlemen that bitcoin were supposed to eliminate. Perhaps the mass closure of exchanges will prompt users to return to the roots of P2P.

i might be wrong and i stand to be corrected but i just feel that their is a possibility that if certain crypto exchanges shutdown that it can pose some fluctuations in the market which might be of a concern or worry to certain bitcoin holders.

It feels like even the slightest global event causing market fluctuations could worry BTC-holders.

Some bitcoin holders might be curious and anxious to know the reason why this exchanges are shutting down knowing fully well that this exchanges have been functional for quite a period of time and this might create some form of unrest.

Let's get to the bottom of this, then. There are BTC-owners here, too. Which of you is feeling anxious or worried about the exchange closures? Share your "pain".

[laspol65]

If you buy and keep bitcoin on an exchange, you trust them to keep your bitcoin safe and let you withdraw anytime you want to withdraw
But what happens when they shutdown?

It is much better to buy Bitcoin and keep it under your control, because it is not advisable to keep it under the control of a third party. Whenever the exchange authorities see a little more Bitcoin in your wallet, they can stop the transactions in your account, then all your Bitcoin will be trapped.
For example, a few months ago, the KuCoin exchange did such activities, closing many accounts.

You might have problem getting your bitcoin back depending on what's happening with the exchange
It also made me wonder if it is the current market condition that's making some of the exchanges struggle. When people are not really trading, making enough money to keep the business running can be hard
Am not saying it's the market condition that's making the exchanges shutdown, there could be other reasons too but for people that want to hold bitcoin for a long time it raises an important question

Anyone who plans to hold Bitcoin for a long time should definitely not use an exchange, because storing Bitcoin in a strong wallet is a much better and better plan. I see many people lazily buying Bitcoin from an exchange and depositing it in an exchange, they are basically making the biggest mistake, your Bitcoin is not under the control of others at all.
So if you can, you can use a hardware wallet, and among the many software ones, you can use Electrum wallet.

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

You should not trust exchanges at all, that's why you must choose a permanent and reliable wallet. And you should deposit Bitcoin in that wallet so that you don't face any problems if you deposit it for a long time, so it's best to adopt a reliable wallet and you will be successful in the future.

[In_cu_bent]

Despite the closure of some exchanges, there are still plenty of exchanges in the industry that continue to operate.

Of course, there are a lot of exchange platforms, even as some of them are closing, more are being established. No exchange should be trusted because they can still be hacked even if they don't announce their closure e.g BYBIT that was hacked in February this year where about $1.5 billion of Ethereum tokens were stolen.

Unfortunately, that is the case. Exchange services have inserted themselves into the P2P space, becoming the very middlemen that bitcoin were supposed to eliminate. Perhaps the mass closure of exchanges will prompt users to return to the roots of P2P.

That is because many crypto enthusiasts trade crypto assets on p2p platforms in order to exchange their cryptos with their local currencies. If people stop doing p2p from cryptocurrency to fiat currencies, almost all the whole centralized exchanges will vanish.

i might be wrong and i stand to be corrected but i just feel that their is a possibility that if certain crypto exchanges shutdown that it can pose some fluctuations in the market which might be of a concern or worry to certain bitcoin holders.

You're not wrong, FTX November 2022 collapse is a good example because it caused pandemonium in the crypto market which forced some cryptocurrency to fall drastically.

[Bitcoin_people]

Just because some crypto exchanges are closing down doesn't mean that Bitcoin holders will be too worried. BitMart, BitMex are closing down, so there won't be much impact on Bitcoin and holders won't be worried at all. There are many alternative exchanges. However, if an investor had Bitcoin on these exchanges, then he would definitely be worried and at risk. Basically, those who are real investors will never keep their Bitcoin in an exchange, but they will use a secure wallet for the safety of their money. The closing of the exchange does not mean that it will have a big impact on Bitcoin, but rather, it may cause a temporary decline due to those exchanges. However, Bitcoin will never go into a long-term decline due to the closure of such exchanges, and investors have nothing to worry about.

[Peanutswar]

If an exchange can disappear anytime, where should we really consider keeping our coin?

But with the used to of the bitcoin is p2p so if you wanted to buy or sell your bitcoin you can sell this into other people that are willing to so just a thing makes for people hard to become accessible to sell their coins converted into their wallet and sell into their fiat currencies. But this wont stop if there still a value with the use of the bitcoin still there is a demand.

[...]
Should we leave exchange completely and switch to a non custodial wallet?

At the first place is we do not recommend storing your assets with the exchange because you dont have a full control with your money they can freeze anytime your account unless with your non-custodial is you are the responsible for the protection of your assets.

[Patikno]

Some crypto exchanges have been shorting down lately
Exchanges like BitMart, BitMex.......
They have been around for some years now but somehow they shutdown
This got me thinking about people that keep their bitcoin on exchanges

If you buy and keep bitcoin on an exchange, you trust them to keep your bitcoin safe and let you withdraw anytime you want to withdraw
But what happens when they shutdown?

The closure of the exchanges you mentioned was due to financial issues within those companies; meanwhile, many other exchanges are still operating today. In my view, the closure of some exchanges actually serves as good news for competitors in the same line of business. So, I think the exchange business is here to stay.

Exchanges that still have the funds to refund their customers can be considered "responsible". The real problem arises when a shutting-down exchange lacks the funds to issue refunds; this is precisely why customers are unable to withdraw their money; a scenario seen in past cases.

Personally, I use exchanges solely for trading crypto; I would never keep a large amount of Bitcoin on one because I believe the risks are significant. These include potential restrictions, withdrawal issues, account problems, frozen accounts, exchange collapses, and so on.

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

The single best way to store your crypto or Bitcoin is in a non-custodial wallet. Nothing can compromise your wallet, as long as you avoid making mistakes, or acting negligently.

[nikola22]

Are the big exchanges free from scams? Both the big and small exchanges are not trustworthy to hold your Bitcoin.

You can get lists of top crypto exchanges that became vulnerable to attacks  - https://bitcointalk.org/index.php?topic=5591547.msg67054620#msg67054620

Prioritize self-custody at all costs, trade using exchanges, and hold only using non-custodial wallets.

of course, large exchanges also face risks of scams and hacks but they are less severe. for example, for a large exchange a hack of $50-100 million wouldn't be critical and it could compensate users their losses and continue operating. however, for a smaller exchange the loss of such a sum could be critical and it would simply shut down. regarding self-custody, I absolutely support this approach but some users find self-custody too difficult and use exchanges instead.