The number of deposits on popular cryptocurrency exchanges continues to decline

According to a new study by TokenAnalyst, the number of users who send money to large cryptocurrency exchanges has been declining over the past few months.

This indicator peaked in 2017, after which the number of unique addresses that are used to send funds to popular exchanges such as Binance and Bitfinex began to decline. If we talk about Bitfinex, then the indicator reached a two-year low, and in the case of Binance, it returned to the levels of early 2018.

TokenAnalyst founder Sid Shekhar is convinced that this dynamic indicates “a lack of retail interest in digital currencies.” He emphasized:

“If we proceed from the assertion that bitcoin is a protective asset during a recession, then the number of new users and buyers should increase, on the contrary.”

According to Blockchain.com, trading volumes on large cryptocurrency exchanges after significant growth in July also continue to decline gradually, and according to SimilarWeb, Binance and Bitfinex traffic shows the lowest value over the past four months.

Jeff Dorman, director of investment for digital asset management at Arca, said that in the current realities, exchanges that earn money by collecting fees need to come up with new ways to increase user loyalty.

For example, the aforementioned Binance and Bitfinex integrate new tools in their trading platforms that allow them to engage in margin trading, as well as provide discounts on commissions to holders of their tokens.

“The formula is quite simple: the more products you offer, the greater the reach of potential users. It’s more convenient for clients when all the necessary tools for trading are in one place, ”he said.

Head of Consulting, Galaxy Digital Holdings Ltd. Ian Taylor noted that over the past year a huge number of cryptocurrency exchanges have appeared and they all offer a different set of products.

“I think that over time, consolidation will begin, aimed at increasing the user base,” said Taylor.