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

[Zaka1221]

There is nothing wrong if any exchange is going because new ones are also coming; it's all part of life and business. No one is going to stay here forever. In the last 18 years, hundreds of exchanges came and then, after completing their time, ended their business for new ventures.
Bitcoin is having enough depth to keep going without these centralized exchanges just do one favor to yourself never keep your coins because this can ruined you mostly when they are going to be packed their business they give time for withdraw your all assets but in few cases things are not favorable because they have no enough time or something other happen which never allow to give specific time for doing this.
Bitcoin holders are never been worried about things like these they are well prepared to live without them as well now there is enough chances to be live without them and having use of your bitcoins its now doing impressively for everyone.

[Antotena]

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.

I look at Bitmart handles and it seems that some people are getting their withdrawals that were requested some past weeks. It seems they are getting the pressure and they are afraid of jail too. The way FTX exited and run away with customers money, the judgement and 20 years jail that he served will come to them too because if you can't learn from a person that did bad and you later do the same, it means it was even done on purpose.

You know what's so good about custodial wallet is that you can do everything within your without going outside the wallet or deposit to an exchange before you can exchange coin for another. There are some wallet that supports multi wallet, they let you have any coin you like and you can manage them with one seed phrase unlike then that you have to separate Bitcoin, Solana, monero and other EVM wallet, they are simple without need for an exchange.

[Smartvirus]

I look at Bitmart handles and it seems that some people are getting their withdrawals that were requested some past weeks. It seems they are getting the pressure and they are afraid of jail too. The way FTX exited and run away with customers money, the judgement and 20 years jail that he served will come to them too because if you can't learn from a person that did bad and you later do the same, it means it was even done on purpose.

The lesson that should be learnt here is on the part of Bitcoin investors who, despite warnings and several occurrences still chooses to leave their coins on centralized exchanges. It’s okay to assume they knew the risk and decided to go with it.

Ain’t no way the CEOs of these exchanges don’t know they are playing around with people’s money when they utilize it for their own purposes and they know the consequences as well since, most of them are regulated by the government.

When investors chose to be ignorant or turn a blind eye, it’s them that should be blame in these exit situations.

[Faisal2202]

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.

That is a good point. When everyone eventually starts moving to Tier 1 exchanges from Tier 3, then these Tier 3 exchanges will eventually have to go bankrupt, and the last one to take action can become a victim. But this does not mean they should go bankrupt. I believe an exchange should always have more funds than the ones they manage, but that can never happen, as far as I checked, but I can be wrong, though.

Because I think Binance has fewer reserves than what they manage. I have not checked, but please double check it from your side.

But the point still stands that this can cause mass closure of old and low liquidity exchanges, and that's not good. So what do you think should be the best way to tackle this situation?

[Z-tight]

There are some wallet that supports multi wallet, they let you have any coin you like and you can manage them with one seed phrase unlike then that you have to separate Bitcoin, Solana, monero and other EVM wallet, they are simple without need for an exchange.

I know that some people would appreciate the ease and convenience that comes with managing their funds in one multi-coin wallet, but i do not like to do things that way. It may not mean much to some, but i prefer to store my BTC in a BTC-only wallet, and altcoins can go in together in a multi-coin wallet, that's the setup i recommend to users as well.

[Renampun]

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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.

It depends on how large the exchange is.. back when FTX shut down, it caused panic in the market and had such a significant impact on Bitcoin prices.. since FTX was one of the largest exchanges in the market at the time, its collapse had a major impact on the market. However, if it were a smaller exchange, the impact wouldn't be as significant, for example, like Bitmart and similar exchanges.. when those exchanges closed, the price of Bitcoin was not affected at all.

But yes, if there are any impacts from the exchange closure, they won't affect Bitcoin's price for long, only in the short term.. after investor confidence returns, the price will recover.

[Obari]

I don't think any exchange would shut down without letting their customers withdraw their money before they do except such exchange is a scam exchange and let me remind you that exchanges are not for holding coins but rather to exchange  them for other currencies.

I don't think the market conditions would be any tangible reason to make an exchange quick for the market because the market has no direct impact on them.

There are also several other exchanges that are still very functional, so we having two or within these range quitting the market isn't something we should be so much worried about.

[ZAINmalik75]

I look at Bitmart handles and it seems that some people are getting their withdrawals that were requested some past weeks. It seems they are getting the pressure and they are afraid of jail too. The way FTX exited and run away with customers money, the judgement and 20 years jail that he served will come to them too because if you can't learn from a person that did bad and you later do the same, it means it was even done on purpose.

I believe as long as a business is running well, it won't think of making an exit from the scene because they are already making good money from it, but if things go bad and the business starts losing customers and almost start to lose money because they have to spend more than they are earning, then they might think of making an exit like that. Some might think of the possible consequences, but some might not think about it, and think they can handle it.

You know what's so good about custodial wallet is that you can do everything within your without going outside the wallet or deposit to an exchange before you can exchange coin for another. There are some wallet that supports multi wallet, they let you have any coin you like and you can manage them with one seed phrase unlike then that you have to separate Bitcoin, Solana, monero and other EVM wallet, they are simple without need for an exchange.

Other than the fact that custodial wallets won't ask you for KYC, I don't tthink there are a lot of differences between an exchange and a custodial wallet, especially when the wallet allows you to swap your cryptocurrencies within the wallet. Those who care about their coins and prefer privacy, they would only use non-custodial wallets where they are the only ones in control of their assets.

[fullfitlarry]

I don't think any exchange would shut down without letting their customers withdraw their money before they do except such exchange is a scam exchange and let me remind you that exchanges are not for holding coins but rather to exchange  them for other currencies.

I don't think the market conditions would be any tangible reason to make an exchange quick for the market because the market has no direct impact on them.

There are also several other exchanges that are still very functional, so we having two or within these range quitting the market isn't something we should be so much worried about.

As far as I can remember, there were some exchanges that shutdown recently, their customers withdrawing their funds, but there was issues or some delays.

This was just a indication how brutal this market is. A lot of competitions from the side, and if a exchanges had some money problems with regards to operational cost, for sure the only thing they can do is to shut it down for good.

Although there could be some owners who can reinvent themselves like Arthur Hayes and still stay on the game.

[nikola22]

That is a good point. When everyone eventually starts moving to Tier 1 exchanges from Tier 3, then these Tier 3 exchanges will eventually have to go bankrupt, and the last one to take action can become a victim. But this does not mean they should go bankrupt. I believe an exchange should always have more funds than the ones they manage, but that can never happen, as far as I checked, but I can be wrong, though.

Because I think Binance has fewer reserves than what they manage. I have not checked, but please double check it from your side.

But the point still stands that this can cause mass closure of old and low liquidity exchanges, and that's not good. So what do you think should be the best way to tackle this situation?

you're right, at least exchanges should have the funds that belong to their users and ideally more, since they should have generated some profit over their lifetime. however, it often happens that exchange founders and owners use user funds at their own discretion resulting in situations where they cannot return all of the funds to users. regarding Binance, they regularly publish proof of reserves: https://www.binance.com/en/proof-of-reserves

we can't directly influence this situation, so I view the closure of small exchanges as an evolution of the crypto market. only those that provide the highest quality service and inspire trust will survive. I think we shouldn't risk our own funds just to keep small exchanges operating.

[Obari]

I don't think any exchange would shut down without letting their customers withdraw their money before they do except such exchange is a scam exchange and let me remind you that exchanges are not for holding coins but rather to exchange  them for other currencies.

I don't think the market conditions would be any tangible reason to make an exchange quick for the market because the market has no direct impact on them.

There are also several other exchanges that are still very functional, so we having two or within these range quitting the market isn't something we should be so much worried about.

As far as I can remember, there were some exchanges that shutdown recently, their customers withdrawing their funds, but there was issues or some delays.

This was just a indication how brutal this market is. A lot of competitions from the side, and if a exchanges had some money problems with regards to operational cost, for sure the only thing they can do is to shut it down for good.

Although there could be some owners who can reinvent themselves like Arthur Hayes and still stay on the game.

There were exchanges like the paxful who left the market and still returned and if I'm not wrong I think they left because of some legal issues but they're back now and working the last time I checked(don't know if they still do today)

Yeah I agree with you about the recent exchange that just left but I'm sure before they did, they left an email for all their customers and if there was any delay in the withdrawal, it might not necessarily be the fault of the exchange but maybe a network jam as a result of over crowded withdrawal request but whichever the case might be, I think they were able to process all those withdrawals I think even for those of their customers who requested a withdrawal late were also attended to.

[ColdLava40]

But what happens when they shutdown?

When they shut down, you have two options.

The first would be, you will be lucky if they still allow users withdraw what is left In their account or secondly, you could accept your faith of losing the coins and move on. You won't be the first to loss coins to some exchanges.

When you see the word centralized, what else could someone think of? You already took the risk when you chose to leave your coins in a third partys custody. When exchanges shit down, it is either they went bankrupt or got hacked. Only some might be generous enough to still distribute what is left for the customers.

[RockBell]

There are some wallet that supports multi wallet, they let you have any coin you like and you can manage them with one seed phrase unlike then that you have to separate Bitcoin, Solana, monero and other EVM wallet, they are simple without need for an exchange.

I know that some people would appreciate the ease and convenience that comes with managing their funds in one multi-coin wallet, but i do not like to do things that way. It may not mean much to some, but i prefer to store my BTC in a BTC-only wallet, and altcoins can go in together in a multi-coin wallet, that's the setup i recommend to users as well.

When it comes to leaving your coin anywhere in an exchange, these are the kinds of situations that we are attempting to avoid because, as we all know, it is not your keys, not your coin. It should be evident to us that anything can happen with cryptocurrencies. There is more for us to comprehend, but exchanges are simply not the best place for you to store your coins. Instead, we should know that you should utilize a wallet. Be it Bitcoin or whichever coin, let us hope that things are going to be much better, and all this is just to help everyone from falling victim of losing there assets.