Stiff Competition In UK Cryptocurrency Exchange Market Sees Smaller Platforms Closing Shop
Having largely stood still over the years, due to stagnant user demand and lack of infrastructure, the UK crypto exchange market has recently been revived by an influx of global crypto exchange platforms including BitMEX, Binance and Coinbase.
Coinbase Breathes New Life Into UK Crypto Exchange Market
The arrival of Coinbase in particular – the first US cryptocurrency startup to achieve a one billion dollar “unicorn” valuation from investors, and the first to bring in $1 billion in annual revenue – has brought a fresh sense of dynamism into the hitherto cool UK market. It officially opened shop in the UK last month, using the removal of exchange rates as an entry strategy to appeal to local users desirous of a well structured and reliable cryptocurrency exchange.
Speaking at the launch, Coinbase UK CEO Zeeshan Feroz, said:
“We have been working to introduce Faster Payments for as long as we’ve been operating in the UK. Customers not only benefit from increased speed, but reduced cost as well. By no longer having to convert funds from Pound Sterling to Euros and vice versa to add and remove funds, there will be no more exchange rates. This will make crypto easily accessible to most people in the UK.”
Smaller Platforms Crowded Out
Coinfloor, which boasts of being the oldest cryptocurrency exchange in London, will lose half its workers concurrently, in the wake of the evolving market environment.
The layoffs of Coinfloor staff was confirmed by CEO Obi Nwosu who said:
“Coinfloor is currently undergoing a business restructure to focus on our competitive advantages in the marketplace and to best serve our clients. As part of this restructure, we are making some staff changes and redundancies”
Established in 2013, Coinfloor is one of the first exchanges on the UK market scene. It has the support of Taavet Hinrikus, founder of TransferWise, Adam Knight, a veteran of Goldman Sachs, Credit Suisse and venture capital firm Passion Capital.
Globally, there are over 200 cryptocurrency exchanges around the world with more coming into the market regularly, leading to increased competition in what is still a small market relative to conventional financial markets.
Speaking about the phenomenon, Mike McGlone, Bloomberg Intelligence commodity strategist said:
“This is a maturing market, so volatility should continue to decline. When you have a new market, it will be highly volatile until it establishes itself”.