The number of cryptocurrency exchanges worldwide will shrink this year, analysts say. According to current data, the cryptocurrency sector leans toward consolidation amid increasing regulatory pressure.
Following the collapse of FTX, regulators in most countries are facing the issue of stability of crypto exchanges. Currently, several countries, such as the US, Japan, and EU member states, are drafting legislation to address this issue, which is at various stages of development. The authorities of many countries are tightening regulations for cryptocurrency exchanges, which is expected to increase the companies' costs many times over, analysts note.
As a result, the number of large trading platforms will decrease. In the future, the crypto sector will likely enlarge and consolidate. One example of this is the recent takeovers of regional exchanges by large companies. In autumn of 2022, Binance acquired Indonesia's Tokocrypto and Japan's Sakura Exchange.
Last year, 26 new services were launched in the digital currency market, down from 63 in 2021. However, more than 100 cryptocurrency exchangers and trading platforms ceased operations in 2021. In 2022, the number of closed crypto services exceeded 50.
Experts believe that market participants will face challenges ahead of a new uptrend, particularly related to attracting investor funds. Meanwhile, crypto market leaders will take advantage of their rivals’ vulnerabilities by buying out the most promising companies on favorable terms. Preliminary estimates suggest that consolidation will be the leading trend for the crypto market over the next year.
Currently, weak companies are leaving the crypto market and are being replaced by stronger competitors. This process will be followed by a new development cycle, analysts say. After the so-called “purge” is complete, the number of major players will increase again, experts predict.
