Bitcoin Showing A “Good Risk/Reward Setup,” ETF to Play A “Large Part” in the Market Sentiments

Now that steam has been taken out of the “frenzied” rally, where low spot volumes added to the carnage, crypto prices are back on the move with the fear of Fed withdrawing liquidity dangling on the horizon.

After Tuesday’s flash crash, Bitcoin is now hovering around $45k and $46k and Ether between $3,400-$3,500.

The rest of the crypto market is also back to moving upwards, with Raydium (RAY), Fantom (FTM), Elrond (EGLD), Mina Protocol, Harmony (ONE), and Solana (SOL) leading the gains and sending the total market cap back again past $2.2 trillion.

As we reported, the funding reset after the pullback is healthy for the market and sets a base for further leg up.

After all, Standard Chartered analysts, as we reported, have given a target of $175,000 in the longer term and see Bitcoin to peak around $100k by the end of this year or early next year with the leading cryptocurrency sharing “characteristics with currencies, commodities, and equities.”

As for what caused this crash, which, like always, was exacerbated by the liquidations of leveraged traders, Galaxy Research stated that it was a big BTC seller who dumped on the over-the-counter (OTC) market that led to the largest forced futures liquidations since May 19, 2021.

It is also worth noting that low spot volumes added to the carnage. On Tuesday, BTC liquidations were 34% of total traded spot volume across major exchanges versus the 1y daily average of 12%, the largest since April 18 when liquidations were more than 90% of traded spot volume, which was a day of extreme volatility and an outlier in the dataset.

Meanwhile, ETH liquidations were 23% of total traded spot volume across major exchanges versus the 1y daily average of 8%.

Macro Factor On The Horizon

According to Asian trading firm QCP Capital, it was “strange behaviour for a bullish market.”

“The outsized move seems to have been triggered by regulatory fears, taking the steam out of the “frenzied” rally,” it said. The rally was frenzied in the sense that retail was leveraged all-in on the alts, pushing the funding rates on some of the major alts’ through the roof and deep disbelief that this rally could fail.

Macro factors, however, are not playing a part yet, with S&P still climbing higher, which could change towards Q4 when the FOMC starts to taper.

“Given how far asset prices have diverged greatly from the real economy, our fear is the potential speed of the mean reversion once the Fed withdraws liquidity.”

In the meantime, the US dollar index is trading at 92.48 while the euro gained 0.2% to trade at around $1.1837 as the European Central Bank kept its monetary policy unchanged on Thursday but slowed down the pace of net asset purchases.

Interest rates will remain at their current lowest levels until inflation reaches 2%, reiterated ECB. In August, Eurozone inflation rose to a decade high of 3%, while their own forecasts are currently projecting a spike in inflation this year to 1.9% due to temporary factors before falling to 1.5% and 1.4% in 2022 and 2023, respectively.

ETF to Play A Large Part in Sentiments

Regulator fears emerged in the US in the form of the SEC preparing to sue Coinbase for its lending product. However, with the expectations rising that we may get a Bitcoin ETF soon, industry experts see it happening by October or November, which may help prop Bitcoin prices.

Recently, SEC Chair Gary Gensler signaled openness to futures backed Bitcoin ETF; since then, seven firms have applied for the same.

But Michael Sonnenshein, CEO of Grayscale Investments, which is working on converting its close-ended Grayscale Bitcoin Trust into an ETF, said that “it would be shortsighted of the SEC to allow a futures-based product into the market before a spot product.”

According to Sonnenshein, both the products should be allowed into the markets at the same time, and it should be left to the investors to choose what they want. He further said that if a futures-based ETF comes before GBTC is allowed to convert to an ETF, it can harm investors who have exposure to GBTC inside mutual funds and retirement accounts.

“Going forward, it is clear that news around the ETF will continue to play a large part in the overall sentiment,” said QCP Capital.

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Author: AnTy

Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions

Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions

2021 has been an explosive year so far.

As prices rallied, so did the crypto market cap from about $780 billion at the beginning of the year to an all-time high at $2.35 trillion on April 17. As of writing, the total market cap is just under $2 trillion.

With this price move, the volume on cryptocurrency exchanges also exploded. As Coinbase revealed in its Q1 2021 results, it did $335 billion in trading volume in just three months.

In total, last month, crypto exchanges did $1.17 trillion, and in April, so far, we have already surpassed $1.26 trillion, as per The Block data.

Comparatively, $3.32 trillion was recorded in volume by the New York Stock Exchange (NYSE) alone in March. NYSE is the largest exchange venue, operating NYSE, NYSE Arca, NYSE Chicago, NYSE American, and NYSE National, which makes up 20-25% of US equity exchange trading.

Interestingly, while total crypto trading volume was a mere 8% of NYSE Group’s volume in September 2020, it reached 48% in February 2021.

These numbers could be benefitted by unique features of the crypto market, which runs 24/7, around the globe, and has thousands of crypto assets, in some cases tokenized stocks as well, listed on them.

Interestingly, Bison, the crypto trading app of Boerse Stuttgart, Germany’s second-biggest stock exchange which is one of the largest in the world, also achieved €2 billion (US$2.4 billion) in trading volume so far this year, up from €35 million ($42.3 million) in November.

Launched in 2018, the app also recorded an 83% surge in the number of its active users to 400,000 since the year started. It allows users to trade Bitcoin (BTC), Ether (ETH), Litecoin (LTC), XRP, and Bitcoin Cash (BCH). BTC -0.83% Bitcoin / USD BTCUSD $ 50,052.83
-$415.44-0.83%
Volume 49.01 b Change -$415.44 Open $50,052.83 Circulating 18.69 m Market Cap 935.51 b
4 h Louisiana Passes Bill Encouraging Bitcoin’s Increased Usage while Commending it on its Success 6 h Olives Are A Better Inflation Hedge Than Bitcoin, says “Black Swan” Author 8 h Ethereum London Upgrade with EIP-1559 Set to Be Released on July 14th
ETH -4.39% Ethereum / USD ETHUSD $ 2,214.41
-$97.21-4.39%
Volume 31.87 b Change -$97.21 Open $2,214.41 Circulating 115.61 m Market Cap 256 b
8 h Ethereum London Upgrade with EIP-1559 Set to Be Released on July 14th 9 h Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions 1 d Hong Kong Restaurant Starts Accepting Bitcoin, Ether & other Cryptos as Payment
LTC -4.71% Litecoin / USD LTCUSD $ 224.92
-$10.59-4.71%
Volume 4.57 b Change -$10.59 Open $224.92 Circulating 66.75 m Market Cap 15.01 b
9 h Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions 4 d Social Trading Platform, eToro US, Adds Chainlink (LINK) & Uniswap (UNI) For Trading 4 d Venmo Allows its 70 Million Customers to Now Buy, Hold, and Sell Crypto Directly Within the App
XRP -6.48% XRP / USD XRPUSD $ 1.05
-$0.07-6.48%
Volume 8.58 b Change -$0.07 Open $1.05 Circulating 45.4 b Market Cap 47.65 b
9 h Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions 1 d Hong Kong Restaurant Starts Accepting Bitcoin, Ether & other Cryptos as Payment 1 d SOL Bucks the Trend and Hit a New ATH as Crypto Market Sees Another Sell-off
BCH -6.16% Bitcoin Cash / USD BCHUSD $ 769.18
-$47.38-6.16%
Volume 3.51 b Change -$47.38 Open $769.18 Circulating 18.72 m Market Cap 14.4 b
9 h Reflecting On “High Momentum,” Crypto Exchange Volumes Jump Up Into The Trillions 4 d Cryptocurrency Inflows Record A Five-Week High; XRP Captures Institutional Interest 4 d Venmo Allows its 70 Million Customers to Now Buy, Hold, and Sell Crypto Directly Within the App

This growth in both users and trading volume “reflect the current high momentum in the crypto market and the increasingly broad interest in cryptocurrencies,” said Ulli Spankowski, CEO of Sowa Labs GmbH, a Boerse Stuttgart subsidiary that developed the app.

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Author: AnTy

Mark Cuban Praises DEX SushiSwap; Now Selling “Personalized, Tokenized Video” on Rarible

The explosion of interest in the NFTs has the trading volumes surging nearly 200% in February to past $7 million.

Billionaire Mark Cuban is all about DeFi and NFTs. Almost every other day, Cuban is talking about the digitized space in which he is personally invested as he revealed that besides Bitcoin, Ether, and Litecoin, which he initially said is worth less than a banana, now also owns AAVE and SUSHI.

In a video over the weekend, he praised the decentralized exchange (DEX) SushiSwap which has been doing more than half a billion worth of volume every day.

Cuban thanked everybody at Sushiswap for making him money while making it easy to yield farm, stake, and swap, all the things that are part of the new future of banking and financial world with DeFi, he said.

He is particularly getting more and more interested in non-fungible tokens, which he compares to his interest in basketball cards but even better. He explained the reason behind investing in digital collectibles saying,

“Once you realize the sense of ownership is the same for a digital collectible as a physical one you come to the realization that holding/maintaining/grading/shipping/buying/selling a physical good is a hassle. It’s fast and easy w digital.”

Cuban is actually hustling on NFT marketplace Rarible, on which he has previously sold his digital piece.

Now, the owner of Dallas Maverick is selling “personalized, tokenized video,” like Cameo but with a twist of the latest technology.

“What’s better than Cameo? A personalized, tokenized video that you can save or sell,” tweeted Cuban.

On buying the collectible video of his, the buyer unlocks an email address that can be used to send a request for a personalized video with a 30 MB file limit. Cuban, in response, records the video, mints it and then transfers the video to you.

While the buyer won’t have any commercial rights on it, they can resell it or keep it forever, “It will be a one of a kind.”

Twitter holder @Pranksy, co-founder of NFTBoxes, has bought 10 of these Cuban videos already. He also gifted Cuban a “Million Dollar Punk Draw ticket.”

As we reported, NFT space is exploding with celebrities like Mike Shinoda jumping in. All of this activity has the weekly NFT trade volumes surging nearly 200% from $1.86 million in early January this year to well past $7 million in the first week of February.

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Author: AnTy

Crypto ETP Volume Surges in January as Institutions Flood the Market

Data shows that the trading volumes for crypto-denominated ETPs saw a significant surge in January 2021. Institutions also appear to be cutting their losses as the crypto market braces for a more significant pullback.

All eyes are on institutional crypto investors this week again, as it appears that some have been making significant plays to begin the year. In its recent weekly report, market data and metrics provider CryptoCompare has confirmed a spike in the volume of assets under management (AUM) in crypto-denominated exchange-traded products (ETPs).

Promising Numbers Across the Board

Per the report, there has been a staggering 93.7 percent increase in the AUM for crypto ETPs across the board. In nominal terms, crypto ETPs now holds an impressive $36 billion. Aggregate daily volumes also jumped above $1.5 billion, marking healthy institutional participation to kick-off 2021.

CryptoCompare noted that Grayscale Investments makes up a significant chunk of these figures, with its various investment trusts housing $22.6 billion, 63 percent of all capital invested into crypto ETPs. The New York-based asset management firm’s products were also found to have represented 64 percent of the entire industry’s ETP volumes, pushing $972 million in daily trading volumes.

Grayscale’s dominance in the institutional investment space has been nothing short of astonishing. The company, which operates several investment trusts for large-cap cryptos, has been the go-to source for institutions looking to get their bit of the crypto pie. As a result, its AUM has been on the rise for months.

Earlier this week, Danny Scott, the CEO of crypto exchange CoinCorner, confirmed that Grayscale purchased 16,244 BTC ($607 million) in 24 hours. Even with the threat of a liquidity crunch, the company has continued to suck up Bitcoins from the open market at incredible levels.

While Grayscale dominated trading volumes, the company’s products still trailed in the spot markets, as the premiums on its shares fell by 8 percent this month.

As for exchange-traded notes (ETNs), trade volumes almost tripled in January. These were dominated by the BTCE product from ETC Group, which saw nearly $50 million in daily trades.

The second-most traded ETN was the BTCW/USD ETN from WisdomTree, which had $7million in trading volumes, while VanEck’s Bitcoin Vectors saw $5 million in daily trades.

Profit-Taking from Investors

Although the commitments into crypto ETPs have been impressive, institutions are also staying vigilant as Bitcoin’s price begins a significant pullback.

Crypto fund provider CoinShares reported that institutional crypto products had seen $85 million in outflows this past week, asserting that some investors seem to be taking profits following Bitcoin’s bull run over the past month.

CoinShares noted a similar trend in Ether-derived investment products, with $3 million exiting the past week’s market.

Despite the strong profit-taking, institutional inflows are still strong, with $359 million entering crypto investment products this week. CoinShares noted that Bitcoin remains investors’ top prize, with the leading cryptocurrency representing 99 percent of all capital inflows this week.

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Author: Jimmy Aki

Crypto Options Exchange, Deribit, Mandates ID Verification for All Users Before the Years End

The largest cryptocurrency option exchange in trading volumes, Deribit, will start mandatory government ID verification to maintain KYC/AML compliance rules.

Panama-based cryptocurrency options exchange, Deribit, requires all users on the platform to be ID verified by the end of the year. As per the official Deribit Twitter, it was confirmed that the tier verification model on the platform would be abolished for a blanket ID verification process for all users on the platform.

This follows a recent announcement by rival and troubled exchange, BitMEX, who will start ID verification on their platform. Both derivative exchanges will require new users and current ones to submit a copy of government ID verification, including passports, driver’s licenses, or legitimate and valid identification documents.

As the world of cryptocurrencies embraces the FATF “Travel Rule,” more entities are expected to join the bandwagon – tougher KYC/AML compliance being implemented. The official Twitter account said,

“New clients will be required to adhere to these market standard conditions in order to be able to open an account.”

“Existing clients will get one month from that date to become verified and upload both required documents (if not already). A formal announcement will follow soon including final timing.”

The new changes replace the old tiered system that allowed users to deposit and withdraw up to 1 BTC (~$13,000) from Deribit exchange without any KYC verification or ID requirements. All users on the derivatives exchange will be forced to verify their ID before trading or withdrawing any amount.

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Author: Lujan Odera

Overstock’s Crypto Trading Subsidiary, tZERO, Hits Record High Volumes in August

  • tZERO, the crypto trading app backed by retail giant Overstock, has announced new record volumes in August.
  • This digital securities platform noted that both their crypto trading app and blockchain-built alternative trading system (ATS) experienced the highest activity since they were launched back in June 2019.

The month of August saw tZERO’s user base grow by 11% compared to July, marking an increase of more than 1,000 new users on the digital asset app. Notably, this year has been relatively bullish for tZERO with a total of 143% growth in user base since it began. The platform is now looking to give traditional brokers a run for their money when it comes to offering digital securities trading services to Wall Street.

Going by last month’s stats, tZERO’s digital asset app grew by around threefold in traded dollar volumes. The reported figure, which is $22 million, is a jump from July’s $7.6 million, while the year-over-year growth stood at 684%. Saum Noursalehi, the CEO of tZERO, further highlighted significant milestones by the project,

“In addition to delivering record trading volume on the tZERO ATS in August, the St. Regis Aspen (ASPD) digital security began trading … These wins, coupled with FINRA’s approval of tZERO Markets, are exciting, and we look forward to offering our crypto customers the opportunity to open brokerage accounts at zero Markets.”

The platform is now incentivizing activity with its recently rolled out zero-fee structure for publicly-traded digital securities; private ones, however, retained the previous fee structure. Nonetheless, the project is not yet out of the words when it comes to product scaling and attracting heavyweight investors to compete favorably against traditional brokerages.

Apart from the crypto trading app, tZERO has been actively involved in the tokenization of assets, not limited to real estate and film productions. It is also quite noteworthy that Overstock began accepting BTC payments as early as 2014, giving the retailer a head start in the space.

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Author: Edwin Munyui

South Korean Exchange, Coinbit, Accused Of Wash Trading 99% Of Its Volume

  • South Korean exchange, Coinbit, was accused of wash trading 99% of its trade volumes by authorities.
  • Coinbit netted over 100 billion Korean won (KRW) through wash trading.
  • There are large discrepancies in the exchange’s accounts.

One of Korea’s largest cryptocurrency exchange is under investigation after the Seoul Metropolitan Police found evidence of wash trading of over 99% of its volumes. According to local reports from Seoul Shinmun, the police have seized Coinbit exchange headquarters in Gangnam district and some property around the country as investigations continue. Trading has since been suspended.

Wash trading is a tactic used by cryptocurrency exchanges using ‘ghost’ accounts to inflate the volumes recorded on the exchange. According to the report over the past few months, the exchange has made over 100 billion KRW ($84 million) from wash trading its volumes.

Coinbit is the large largest cryptocurrency in Korea, with over 275,000 daily active users on the platform. The Seoul Metropolitan Police is charging the top management of the exchange, including the owner, Choi Mo, for fraud affecting every one of the traders on the exchange.

The investigations found out that 99% of the total trades on major crypto pairs such as Bitcoin (BTC), Tether (USDt), and Ethereum (ETH) were wash traded. Most of these trades arose from ghost accounts as no corresponding deposits and withdrawals were shown on the exchange’s books.

The management is also accused of tampering with the market holding the small-cap cryptocurrencies. The report states that the top directors realized market margins through whale buy and sell transactions of certain coins to move the market – much like a pump and dump scheme.

The cryptocurrency field has seen cases of wash trading plummet over 40% in the first half of the year, but enough is yet to be done to curb this harmful practice. In July, BEG reported Canadian exchange, Coinsquare was accused of wash trading its volumes by the Ontario Securities Commission (OSC).

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Author: Lujan Odera

Bitcoin (BTC) Futures Volumes Dip To Year-To-Date Lows But Open Interest Growth Keeps Investors Bullish

The Bitcoin futures daily trading volumes hit a low of $5.81 billion this weekend representing the lowest futures volume since Jan 1, 2020. The price of Bitcoin (BTC) has since dropped to $9,100 for the first time in two weeks, representing a 5% slide over the weekend.

Despite the weakening futures volume market and plummeting BTC’s price, the growing open interest volumes on BTC derivatives gives off a bullish signal in the near future.

Bitcoin futures volume dips to yearly lows

According to Skew Markets, a crypto derivatives data aggregator, the volume of BTC futures traded on Saturday, June 13, 2020 set its year-to-date low. Despite institutional drivers of the market –Intercontinental Exchange’s Bakkt and CME BTC futures – being locked for the weekend, the slip from $20 billion in futures volumes traded on Thursday, to less than $6 billion 24 hours later raises doubts on a potential recovery in price.

OKEx, Huobi and Binance exchange markets represented the biggest losers in volumes traded on Saturday.

C:UsersUSERDownloadsskew_btc_futures__aggregated_daily_volumes (1).png

OKEx lost 73% of its total volumes in two consecutive days, Huobi lost 70%, Binance lost 72% and BitMEX lost 75% of its total futures volume in the same time frame. The four top crypto exchanges however, still controls over three-quarters of the Bitcoin futures market.

Despite the futures dipping, the open interest in both BTC futures and options contracts is moving back towards pre-March crash levels.

Open interest the savior?

Bitcoin’s open interest is heading back to pre-March 12th crash that saw the price of BTC skim below the $4,000-mark. At the height of BTC’s price in 2020, in mid-February, Bitcoin futures OI shot up to all-time highs of $5.5 billion before crashing back to a yearly low of $1.7 billion on March 12, 2020.

C:UsersUSERDownloadsskew_btc_futures__aggregated_open_interest.png

Bitcoin futures OI market is finally getting back to pre-crash levels, testing the $4 billion dollar mark at the start of the month. The OI currently stands at $3.6 billion.

Bitcoin options OI surpass pre-crash levels

Bitcoin options volumes were not sparred over the weekend with a 75% drop in two days culminating on Saturday, June 13. As of time of writing, on Monday, June 15th 0900 hours EAT, the volumes traded have barely crossed the $40 million mark. Deribit exchange, the leading crypto options platform led the drop over the weekend as buying pressure eases.

C:UsersUSERDownloadsskew_total_btc_options_open_interest.png

Bitcoin options OI at all-time highs as institutional investors come into the market

Nonetheless, the options open interest has not faltered, similar to the futures. The total options open interest is currently ballooning – seeing over 440 percent growth over the course of 2020 – despite the March crash. The spike in BTC options OI is mainly influenced by the entry of institutional players in the market.

According to Arcane Research, the overall market share of Bitcoin options OI has grown from less than a percent at the start of May to over 22% six weeks later.

(Images from Skew Markets)

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Author: Lujan Odera

LocalBitcoins Show Strong Transaction Volume Despite The Recent Regulatory Clampdowns

Bitcoin peer-to-peer decentralized marketplace, LocalBitcoins, has continued to maintain steady volumes despite the change in policies around the world that now require the user to complete a KYC procedure and even banned cash transactions.

The policy change was undertaken in accordance with new European anti-money laundering directives. In fact, the policy change was made in June 2019 and people thought it would really hamper the business and customer inflow.

However, the data suggest that policy changes didn’t really have any negative impact on the peer-to-peer exchange’s volume. In fact, the trading volume on the platform is well on-par with centralized exchanges such as OKEx and Coinbase, as per a data set from Nomics.

The data set revealed that in the past 12 months, OKEx and Coinbase have seen a volume drop of 30% and 45% respectively, while LocalBitcoins in the same time frame saw a decline of 27% which is less than both the prominent exchanges.

One of the spokespeople from the peer-to-peer exchange revealed that cash transactions on the platform were minimal and constituted only 0.5% of the total volume on the exchange. Thus removing the cash transaction option did not really have any long-lasting impact.

LocalBitcoins was created back in 2012 as a peer-to-peer exchange where anyone can buy/sell their bitcoins without the need to create an identity-based account, The main motive was to avail banking and financial services to the underprivileged who cannot get access to banks.

Developing Nations With Financial Troubles Contribute Largest to the Volumes

LocalBitcoins registered elevated transaction volumes from developing nations that are facing financial troubles due to various reasons. For example, transaction volumes recorded from Argentina, Colombia, and Venezuela have risen by 51%, 46%, and 125% respectively in the past couple of months.

Thus, it is quite clear from these statistics that LocalBitcoins volume hasn’t degraded after the policy change which many believe would bring the platform’s doom. In fact, since the policy change, the exchange has managed to keep its trading volume in-line with mainstream centralized crypto exchanges These statistics also prove that people do not really care about privacy for as long as they get to trade bitcoin.

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Author: Silvia A

LocalBitcoins Weekly BTC Trading Volume Drops to a 7-Year Low, Competition Picking Up

Bitcoin volumes from LocalBitcoins has hit a 7-year low; the peer-to-peer OTC exchange has been a dominant player in the field since 2013. Latest stats, however, shows that weekly traded BTC are now at 3,144 ($28 million) compared to a high of 13,000 Bitcoins last year.

Data from Coin Dance further revealed that the platform’s activity has been on a steady decline since the crypto market bull-run in 2017. During that period, LocalBitcoins volumes recorded 7,519 BTC in a week which translated to $129 million as per the prevailing market prices.

Despite a bear market during the first half of 2019, the average amount in dollar values traded on LocalBitcoin’s in the last year are higher than 2020’s stats;

localbitcoin-volume
Source: Coin.Dance

Why is the LocalBitcoin Volume on a Decline?

This plunge in activity has been attributed to the company’s change in KYC/AML approach. LocalBitcoins which operates on a Finnish license enhanced their due diligence process not sparing even the smallest of traders. In a country like China, most of the platform’s participants had already begun to slowly leave, over the past two years. However, the exit rate was then accelerated towards the end of January 2020 when the OTC Fiat-crypto provider suspended some accounts.

Source: Paxful Coin.Dance

Other players like Paxful have also emerged to serve this niche, therefore, destabilizing LocalBitcoins’ monopoly, like market position. Given this dynamic, LocalBitcoins is currently in a tough spot, as European regulators close in more on crypto operations.

LocalBitcoins Future

The future of this P2P exchange hasn’t yet faded away, although it will no longer be enjoying their large market share going forward. Developing economies in South America and Africa still find value in LocalBitcoins’ OTC given local currency volatility in countries like Venezuela and Argentina. In addition, the regulatory trends might also catch up with LocalBitcoin’s competitors, which would probably trigger a similar reaction from crypto users trying to avoid the oversight.

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Author: Edwin Munyui