Americans May Need Enhanced Decentralized Exchange Liquidity To Improve Their Trading
- Americans will not be able to have access to many different altcoins
- This is due to the fact that exchanges fear regulations in the US
During the last months, different cryptocurrency exchanges decided to exclude U.S. customers from their platforms due to regulatory concerns. BitMEX and Bitfinex have been blocking US customers since 2017. Some of the platforms that have blocked U.S. citizens include Binance, Poloniex, Bittrex and Bancor.
Crypto Exchanges Exclude U.S. Customers From Their Platforms
One of the solutions for crypto users to have access to other digital assets that are now blocked is by doing so through a decentralized platform. Bancor, for example, claims to be a decentralized exchange (DEX), but in this case, it showed that the firm is more centralized than what many individuals and investors suppose.
Decentralized exchanges have slower systems and generally, the UI is not as good as the one that centralized platforms have. In addition to it, decentralized exchanges have low liquidity, which is not good for users that want to trade on a daily basis.
U.S. users on the Binance exchange, which has one of the largest liquidities for altcoins in the market, have until September 12th to trade and deposit funds on the platform. After it, customers would only be able to access their wallets and funds, but not the trading services. The main intention behind this ban is to avoid regulatory problems in the United States since there is no clear information from regulatory agencies on how to deal with digital assets.
At the moment, less than 15% of Binance users come from the United States, and this is something that is expected to have an impact on the market in the long term. With a reduction of liquidity among altcoins, there is going to be more demand for Bitcoin and more trading volume focused on larger cap coins.
In addition to it, less access and liquidity for altcoins could make these virtual currencies drop. Meanwhile, DEX exchanges could eventually experience increased liquidity something that would help them have access to different assets as well.
As in the future, American citizens are going to be losing the possibility to trade many altcoins, we might see a stronger Bitcoin and a falling altcoin market.