The Bear Market Has Wiped Out 25 Cryptocurrency Exchanges In Just 1 Month.

The ongoing cryptocurrency bear market has had an impact on various sectors, with exchanges becoming the most recent victims. Indeed, the number of exchanges has decreased as cryptocurrency-related firms struggle to stay afloat in the face of substantial sell-offs.

As of July 6, the global number of crypto exchanges was at 500, a decrease from prior months’ highs. It was  discovered that the sector has lost 25 exchanges in 30 days by using a web archive tool, considering the total stood at 525 on June 6, according to CoinMarketCap data.

The demise of crypto exchanges is linked to the general decline in the value of the crypto market, as various companies in the industry seek exits. Exchanges have been impacted by other macroeconomic factors, such as growing inflation figures, which have made it difficult to sustain firms.

Crypto firms have generally responded to the bear market by re-evaluating their future plans, and exiting the market appears to be one of them.

Sell-offs in major digital currencies such as Bitcoin have mirrored the broader stock market fall, notably in the technology sector. The Terra (LUNA) ecosystem collapse exacerbated the situation, potentially eroding faith in the sector.

Notably, smaller exchanges are likely to be the most hit, as some investors have chosen to halt trading and HODL their assets in anticipation of the next market rally. Furthermore, as the bear market worsened, regular investors were forced to quit the market.

Surprisingly, the big price correction has not spared leading exchanges, which have been compelled to restructure their operations in order to remain open. To maintain operations, Coinbase, the top exchange in the United States, placed a hiring freeze in addition to announcing a layoff.

Following the implementation of the reforms, regulators may become concerned and establish stringent legislation to protect investors. Notably, most exchanges that close down do not always communicate the status of investor deposits. As a result, trust in the burgeoning crypto sector has dwindled.

Although the cryptocurrency business is still in its infancy, some market observers believe the closure of exchanges will boost the sector. They believe that the bear market is a great time to purge non-serious crypto companies.

In general, the ongoing market slump continues to have an influence on the global economy; the focus will be on how cryptocurrency exchanges and firms deal with the negative pressure and withstand the ongoing financial onslaught.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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