Conversation

It's a good question! Most will probably die off, especially ones with nothing special. Many will survive in niche markets--regionally licensed exchanges e.g. Some have loyal customers. And many have lots of runway--can last another few years trying to make it work.

Quote Tweet

Mable Jiang

@Mable_Jiang

May 13, 2020

I've been thinking: if there's no product differentiation, why some of the second-tier exchange still exist today? I get it when people say certain exchange has its hardcore community, or their IEO last year was popular, but how about now? What's their outlook in a year or 2?

Show this thread

6:04 PM · May 13, 2020Twitter Web App

Replying to

and

The majority of volume is done by automated trading and market making. And it takes time to program the connector, getting everything right with API commands, rate limits and liquidity management. If you still make a profit on 2nd tier exchanges, why switch?

Replying to

Only works as long as they have customers--and some will bleed. But yeah others will keep a small-ish amount of volume between MMs already set up and loyal customers.

Replying to

and

tier2 exchanges survived to date bc they keep trying to find new investors (China rich ppl) to buy in get rich scheme after cash gets burned from prev investor. But they can only hustle so many times and I think this year will be their last break. Most already KO

Replying to

and

I like your thought about regionality. Maybe one thing that will differentiate the ones to survive from others is the ability to get regional traction cost-effectively (e.g. by collaborating with strong local partners/conglomerates), and the relationship with the local regulator

Replying to

Totally agree. I think this is especially true in countries where the fiat onramp is important and difficult--Korea, Japan, and India come to mind.