Crypto Exchanges Use Lull To Build Capacity And Improve Systems

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MUMBAI: The crypto frenzy that engulfed exchanges in the first half of 2021, following a historic bull run in Bitcoin and other tokens, is finally simmering.

WazirX, India’s largest stock exchange by volume, reported a 60% drop in trading activity in June compared to May. Other crypto platforms such as CoinDCX and Coinswitch Kuber also saw a similar drop. User registrations also declined, although exchanges did not reveal the numbers. The decline indicates that frequent traders have exited while long-term investors hold their positions.

Crypto platforms are taking advantage of the lull to build capacity and improve the stability of their systems, executives told us. The crypto bull run and the resulting spike in trading activity meant that many exchanges were frequently down for maintenance, preventing users from trading. Swapping manpower and dedicated resources to scale capacity in real time, putting almost everything else on the back burner.

We didn’t have the bandwidth to build anything new in the past five to six months due to insane volumes, said Nischal Shetty, co-founder and CEO of WazirX. The idea now is to work on both improvement and new features. He added that the company has hired more than 100 people in the areas of technology, marketing and support.

Trade income is the main source of trade income. Sharan Nair, commercial director of CoinSwitch Kuber, said bear markets could be good for trading despite the possibility of lower income.

Bear markets provide a silver lining for good trading, Nair said. It gives you this ability to scale, build a robust system, and launch new products.

Nair said the platform is improving its security and is focusing on launching educational initiatives and products to help crypto holders get more out of their existing assets.

ZebPay recently launched a lending product that allows crypto investors to earn passive income. We have always recommended investing in crypto assets for the long term. Today, assets and technology are still in their infancy. While we view these assets as a tool for long-term wealth building, we want to make sure all of our investors get the most out of their investments, said Avinash Shekhar, co-CEO of ZebPay.

Exchanges in India have witnessed unprecedented interest from retail investors and an increase in listings across all age groups during the first half of the year. WazirX trading volumes crossed $ 6 billion in May. And since the Supreme Court overturned the RBI’s ban on banks dealing with crypto companies last year, listings have increased 1,800% on CoinSwitch Kuber, nearly 700% on CoinDCX and 5 000% on WazirX. Despite the decline in June, WazirX’s trading volume stood at $ 2.5 billion, up from $ 101.9 million in June 2020.

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