Cryptocurrency exchanges banking on excess leverage won’t make it through the current bear market, according to Bit.com CMO Toya Zhang.
Bit.com is the second-largest crypto options exchange, established as part of unicorn Matrixport’s ecosystem.
Headquartered in Singapore, it offers spot, futures, perpetual contracts, options and savings. The company founded by Jihan Wu and mining rig manufacturer Bitmain in 2019 recently said it is doubling its workforce despite the large-scale layoffs seen elsewhere in the industry to take advantage of the available talent.
Zhang, who will speak at the 2022 European Blockchain Convention this week on the transition from Web2 to Web3, said the market correction will result in a number of companies falling by the wayside.
“The cryptocurrency market stands at a clear turning point. Companies will either pivot and manage to survive the storm or will suffer the consequences,” she said.
“The future crypto services format will be a combination of Web2 and Web3. Exchanges must prioritise a customer-focused and on-chain aggregated service approach; those still banking on excess leverage won’t make it through the crypto winter.”
Both traditional and digital finance markets are in turmoil, with an ongoing conflict in Ukraine and significant market uncertainty. The chaos has wiped more than $2 trillion in value off the crypto market, with several institutions going bankrupt and retail investors losing their life savings.
With scepticism at an all-time high, the wider public are lacking confidence in those who they feel are responsible gatekeepers for their assets. As a result, many companies are taking this time to focus on finding ways of maintaining trust with their investors.
“In order to stand out, exchanges like ours will need to provide true value to consumers with services and tools that are built with simplicity at the cutting edge,” added Leslie Hsu, director of business development at Bit.com.