The growth of cryptocurrency market has been stupendous in 2018 as an increasing number of people are spending on cryptocurrency. The exceptional increase in the demand for cryptocurrencies has been a big threat to the preeminent cryptocurrency exchanges like Bittrex, Binance, Kraken, Bitstamp, and Coinbase(GDAX). Registration requests are sent by more than 100,000 new users on a daily basis, making it necessary for certain exchanges to aim system scalability. They are also stopping new registrations to reduce the burden of platforms. Due to the increase in pressure, the everyday trading volume reached $9.5 billion.
The Rapid Growth Rate in the Cryptocurrency
Changpeng Zhao, Binance founder, and CEO informed that his platform was summing up approximately 250,000 novice users in a day. He also apologized via an official statement for giving the maximum importance to serve the existent members. He said that both the tech and support team were working throughout the day to serve the new 250,000 users, which were added in the past 24 hours. On January 4, 2018, Binance made an announcement to pause new registrations due to the over excessive acceptance among the users.
Kraken and Coinbase have dedicated a prominent part of their capital and resources in boosting the customer assistance and scalability of their platforms in the last December. Kraken revealed that it has upgraded its major system. It improved its functioning and continued to enhance its trading platform to assist new users. The Kraken development team has accepted that its present infrastructure is unreliable and degraded, ensuring to promote it during the whole of January. The company informed that they have made an excellent progress in system upgrades in the past one week. As they were not able to do all the updates, they would undertake the most effective measures. At that moment, they still considered the systems to be unreliable and degraded.
As per the reports, regional exchanges like South Korea’s Bithumb, the second largest cryptocurrency in the world with respect to daily trading volume, stopped welcoming new users. Yahoo Finance, Mitch Steves, Amit Daryanani and RBC Capital Markets informed that the cryptocurrency market could be about $10 trillion in value. They said in a research note on 12th December that they feel it is quite tough to make price statements on a near-term basis. They
added that cryptocurrencies are to stay for a longer term and will turn out to be a huge market in future.
According to the announcement by Chineseinvestors.com, Inc, it has got into an agreement with Blockchain BTM, LLC to conduct a Bitcoin ATM at its San Gabriel, California office. It planned for the expansion to serve other Chinese communities across the United States. The Bitcoin ATM, which is situated in the lobby of Company’s offices and remain open from Monday to Friday from 9 am to 6 pm, makes it easy for people to buy Bitcoins. Buyers can access site customer service agents directly to provide suggestions related to the Bitcoin ATM in both English and Chinese languages. The Bitcoin ATM machine translates into 5 languages, inclusive of conventional and elementary French, English, Spanish, Korean and Chinese. Cryptocurrency buyers can purchase Bitcoins of approximately $7000 worth from the ATM. it also prints a wallet digitally, when the buyers do not have a digital wallet to carry the cryptocurrencies.
Reasons Behind the Struggle of Big Exchanges
As per the reports, Korbit, South Korea’s third-largest cryptocurrency exchange was taken over at a price of $140 mln by a $10 bln gaming pro in Nexon in late 2017. The leading exchanges like Bitstamp, Kraken, Binance, and Bithumb could be priced more than $1 bln. Coinbase was priced at $1.6 bln in its recent funding round. Cryptocurrency exchanges are striving hard to meet the towering demand of investors even after the great market evaluation, massive profit margins, and other resources. The stringent Anti-Money Laundering (AML) and Know Your Customer (KYC), the companies were forced to employ the authority. Every user application should be manually validated and approved.
Segregation of fraud accounts from legal users is a must as it can result in accusations and fines for results. Accordingly, the vetting process of users is accurate and demands a good deal of efforts from the employees of exchanges. The transactions are increasing more than 100,000 users in a day and exchanges are accepting more than 1 million trading account confirmations at least in a month. If the acceptance process of accounts consumes over 10 minutes in an account, employees have to cover 166,666 hours per month. It can be predicted that in the coming months, global cryptocurrency exchanges will bring in a significant modification in their systems. Till then people, mainly the beginners in cryptocurrency will have a tough time to open authorized trading accounts.