How Healthy Are Crypto Business After a Hard 2018? What’s Hindering Bitcoin’s Ecosystem Growth?
Although the cryptocurrency market has been in a bear trend during 2018, it seems tha the market continues to grow and expand all over the world. Indeed, CoinMarketCap shows that there are more than 2000 digital assets listed on its platform and some exchanges continue to add thousands of new users to their platforms each day.
During the last few years, several new companies and business models started to grow and expand in the space. Some of the main methods to make money were day trading, ICO investment and mining activities. However, most of these have already been exhausted. Due to this situation, individuals are less interested in digital currencies.
Risk diversification is also a problem in the cryptocurrency space. Indeed, most of the crypto users tend to have a diversified crypto protfolio. However, this is something that will not allow users to be protected against volatility in the crypto market.
When Bitcoin (BTC) falls, most of the other digital currencies fall as well. Crypto prices are very correlated. Diversification should be performed by individuals by holding other assets rather than only cryptocurrencies.
Although 2017 and the beginning of 2018 were very promissing for ICOs, most of them were scam and some others were not able to keep growing in the market. This is due to the fact that there was a lot of hype related to virtual currencies and blockchain technology and everyone wanted to participate in the market.
ICOs allowed several users to earn a lot if the ICO token they’ve invested in pumped short after it was launched to the market. However, most of them failed and were not able to deliver what they promissed.
As mentioned before, the market has been behaving in a very volatile way. This did not help users predict what was going to happen with specific digital assets. This is why there were some companies that decided to launch stablecoins. These have been created in order to reduce and minimize volatility in the market. These coins have been pegged to the US dollar or other stable fiat currencies.
Another porblem that the cryptocurency market is currently experiencing is related to liquidity. There are hundreds of exchanges around the world, but some of them do not have enough liquidity to keep a stable price of Bitcoin and other digital assets.
These problems will persist in the industry and could even deepen in the future. This would be harming crypto adoption in the future. This is why, the Blockchain Exchange Alliance (BXA) has decided topartner with ONEROOT and develop a new technology to create a nework of decentralized exchanges.
The exchanges will be sharing a single and large liquidity pool and order books with the BXA ecosystem. BXA has licenses in several jurisdictions around the world including Australia, Peru, New Zealand and Canada.
Dr. Byung Gun Kim, the global co-CEO of BXA, commented about it:
“We aren’t figthing fiat. We realize that the crypto movement has a lot to gain if it partners strategically with the fiat-powered system. And that is why we are creating multiple fiat-to-crypto exchanges with many currencies as the backbone of a global payment network.”
BXA will be solving crypto trading platforms’ problems and integrate them with financial institutions. This is what Tony Sun, Chairman of the ONEROOT Foundation and BXA global co-CEO said.
A good way for exchanges to keep being profitable is to pool their resources and improve liquidity and consumers’ services. This would increase the number of traders in the market and produce a new cpaital influx into the crypto space.