Crypto Exchanges Close as Trading Slump Deepens, With BitMEX and BitMart Shutting Down

Cryptocurrency exchanges that depend heavily on retail investors are shutting down as trading volumes sink to their lowest level in more than two years.

CoinDesk reported on July 28 that derivatives exchange BitMEX will permanently end its services in September. BitMart has also told users to stop trading within 30 days and withdraw their funds within six months.

Spot trading volume on major centralized exchanges fell to $1.05 trillion in April, the lowest level in 25 months. Trading volume at South Korea's five largest cryptocurrency exchanges also dropped 88% from its peak.

"There is no longer enough trading volume or retail investment demand," Jason Fernandes, co-founder of AdLunam, told CoinDesk. Only exchanges that do not rely on retail trading will survive, he added.

Rising regulatory costs are also adding pressure on small and mid-sized exchanges. Michael van de Poppe, chief investment officer at MN Capital, said only large exchanges can handle complex regulatory requirements. Smaller exchanges are left with two choices: leave the market or pursue mergers and acquisitions.

To survive, exchanges will need scale, regulatory compliance, reserve transparency and a broader lineup of financial products, rather than depending on short-term speculative demand from retail investors, CoinDesk reported.