Two major digital currencies, such as Bitcoin and Ethereum experienced problems on Friday. In the case of Bitcoin, several factors had a negative impact on Bitcoin. It is no secret that Bitcoin is the largest cryptocurrency in terms of market capitalization. However, leading digital currency had to deal with problems as trading volume fell, which is a serious problem.
Let’s have a look at how the cryptocurrency exchanges are making money and why the low trading volume is a big challenge for their businesses.
The major source of income for exchanges is the fee they receive for making trades.
The Bitcoin trading volume is fell from $4 billion per day to the current amount. It means that trading volume decreased from $4 billion to $200 million a day. The present size is 20-times smaller than it used to be several months ago. This data is based on the information provided by the Bitcoin and crypto data company Messari.
This is not the only problem connected with Bitcoin as transactional volume on the Bitcoin blockchain also decreased. For example, the amount of money sent each day fell to the lowest point since May. In October, this amount is less than $800 million.
It is important to mention that last week, Binance, which is the world’s largest exchange by volume broke a record. Its cumulative profit surpassed $1 billion.
Digital currencies on October 18
Last week presented many challenges for cryptocurrencies. On October 17, Bitcoin’s price fell to less than $8,000. The situation got even worse as the price dropped to $7,915, which was the worst result in October. Hopefully, Bitcoin started to recover as the price rose above $8,000. However, Bitcoin was unable to gain momentum, and on Friday its price was $7,843.
The second-largest cryptocurrency which is Ethereum was also in a difficult situation. On October 18, Ethereum’s price was $171.