It was heralded as the end of an era in crypto. BitMEX, the centralized exchange that Arthur Hayes helped found in 2014, has officially announced that it will be closed after: 11 years operation.
The exchange pioneered perpetual swaps with 100x leverage, and perpetual markets eventually became the dominant crypto derivatives product.
BitMart, another central exchange that is among the top 10 exchanges but falls further down in the rankings, Closing the trading platform.
The last time a major CEX closed was during the FTX crash in November 2022. Instead of causing a deeper crypto winter, bitcoin started to rise after just two months and reversed the balance 21.5 thousand dollars It will reach the support level in January 2023.
There is talk among cryptocurrency netizens that the closure of BitMEX could trigger another reversal.
Differences between FTX boom and BitMEX crash
The impact of FTX’s collapse on crypto markets is quite different from BitMEX’s circumstances. The former relied on the illiquid FTT exchange token and had been misusing customer funds for months.
Binance’s announcement that it would sell its FTTs threw investors into panic. The public tried to withdraw billions of dollars of assets from FTX. The exchange was unable to fulfill these orders due to a lack of funds, leading to bank runs, bankruptcy, and years of recovery efforts.
By comparison, BitMEX’s shutdown was tame. The stock market could not find buyers, probably due to the problems surrounding it. $270 million insurance fund.
It was criticized for its aggressive purge engine. a casefiled on July 23He claimed that “BitMEX strategically freezes its servers during periods of high volatility.”
“The Insider Trading Desk can maximize the number of clients to liquidate,” he said.
He assured the company owners Assets exceed liabilitiesIt’s a very different situation than FTX’s bank run.
The new phase of stock market consolidation
In a post on CryptoQuant Insights, XWIN Japan observed that BitMEX and BitMart’s ceasing of operations signals a major shift in the crypto world. To them, these closures were just part of a broader industry consolidation.
The rising Binance BTC reserve showed that liquidity was moving to the largest surviving exchanges. This was not a sign that more Bitcoin was being sent to Binance to be sold immediately.
Meanwhile, tighter regulations, rising compliance costs, and increased corporate involvement were making it harder for smaller platforms to survive and attract users.
Current trends suggest that the next market cycle may be increasingly dominated by exchanges that combine institutional-level compliance with greater transparency.
Final Summary
- The BitMEX and BitMart shutdowns are very different, both in nature and impact, from the FTX crash that marked the 2022 market bottom.
- In the coming years, fewer, larger exchanges that meet institutional standards will survive and compete for market share.
