Bitcoin in UK Takes Heavy Blow As Coinfloor CEO Decides To Cut Most of Exchange’s Staff
Bitcoin Receives Heavy Blow As Coinfloor CEO Decides To Cut Most of the Staff
Bitcoin is known for its volatility and its heavy price swings, however, the currency has hit a period of stagnation lately after the massive bull run last year. With the volatility so low, trading volume is decreasing as some people make a lot of money via speculation on the price and, if the price does not change, they will hardly be able to do it.
With its price ranging from $6,200 to $6,800 USD lately as most exchanges and investors wait for the global regulators and the world’s financial companies to decide how they will react to it, the oldest crypto exchange from the United Kingdom, Coinfloor, seems to be in a very bad situation.
Coinfloor was launched in 2013 and it was a heavy blow to Bitcoin in London that the exchange decided to lay off such a significant part of its staff. Obi Nwosy, the CEO of Coinfloor, has affirmed that the company has seen volume decrease a lot during the year and that the company is currently restructuring to focus on its competitive advantages as a way to serve the clients better.
In the last 12 months, Coinfloor has traded about $1 billion USD in Bitcoin, according to information released by Nwosu. The company is backed by a former director of Goldman Sachs and Credit Suisse, Adam Knight, and by the founder of TransferWise, Taavet Hunrikus.
Rise And Fall In Volume
The main trouble that many exchanges are facing is that the volume of Bitcoin and crypto trading has exploded over 2017 but also decreased a lot during 2018, which coincides with the bull run of 2017 and the long bear market of 2018. This made many companies rethink their business models.
With over 200 exchanges around the world, most of them created in the last two years, the market has become overcrowded.
Mike McGlone, from Bloomberg Intelligence, has stated that this is normal because this is a maturing market and that the volatility should continue to decline over time, as newer markets have less liquidity and their volatility stops over time.
Coinfloor In Trouble
The reports seem to suggest that the company will fire most of its 40 employees. However, no reports that the company would shut down were made. The numbers do not seem to be final as the company is still making the necessary changes to “focus on competitive advantages”, which will allegedly save the company.
Despite being the oldest exchange in the United Kingdom, Coinfloor recorded a low volume last month, only $23.5 million USD. Coinbase, the top US exchange, for instance, was able to get $3.2 billion USD in volume while the giant Binance had $30.8 billion USD. The company seems to be more interested in institutional investors and physically-settled Bitcoin futures now.
Will the company resist? As the volatility decreases, it seems like many speculators and people who believed that the way of investing in cryptos was by arbitrage are likely to abandon the game or at least trade less often, which can certainly lead to future problems down the road for many exchanges and it looks like Coinfloor might be one of them.