Several sectors of the cryptocurrency industry have been damaged by the continuing bear market, with exchanges being the most recent to suffer the effects. In fact, the number of exchanges has decreased as crypto-related companies fight to stay viable amidst massive sell-offs.
As of July 6, there were 500 crypto exchanges worldwide, a down from the previous month’s highs. Using a web archive tool, Finbold calculated that the industry has lost 25 exchanges in the last 30 days, given that the number stood at 525 on June 6, according to statistics from CoinMarketCap.
The destruction of crypto exchanges is partially attributable to the decline in value of the whole crypto market, as several enterprises in the industry seek exits. In addition to the crypto market crash, exchanges have been damaged by other macroeconomic variables, such as increasing inflation rates, which have made it difficult for firms to survive.
Crypto-businesses are modifying their strategies
The majority of crypto firms have reevaluated their future plans in response to the market crash, and exiting the sector looks to be one possibility.
There is a correlation between declines in large digital currencies such as Bitcoin and the wider decline in stock markets, especially in the technology sector. The Terra (LUNA) ecosystem catastrophe exacerbated the crisis and may have damaged confidence in the industry.
Notably, smaller exchanges are likely to be the most hit, given that some investors have chosen to suspend trading and HODL assets in anticipation of the next market boom. In addition, the intensification of the bear market compelled ordinary investors to abandon the market.
Intriguingly, the big price correction has not spared key exchanges, which have had to restructure their operations in order to stay open. In order to continue its operations, Coinbase, the largest cryptocurrency exchange in the United States, placed a hiring freeze and announced layoffs.
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