Bittrex was one of my favorite cryptocurrency exchanges, and I regularly traded on the platform from 2016-2018. Bittrex did not have any high-yield staking rewards, and was a bare-bones platform I used when I first started. In 2016, I remember purchasing XRP and NEO before they took off before the cryptocurrency winter of 2017. Bittrex was user friendly, and the platform had passable trading tools and charts that made tracking volumes and order books easy. The platform had a wide variety of cryptocurrencies and had reasonable fees, but did not offer much more than that, which led to its eventual downfall as other platforms offered more staking programs that could earn users passive income.
After so many high-profile cryptocurrency exchanges and platforms including FTX and Blockfi have declared bankruptcy, I am extremely leery about putting my money in centralized exchanges. Bittrex seemed to be on solid footing in the past, and was physically located in the Seattle area.
The root cause for the Bittrex bankruptcy was the recent SEC determination that certain cryptocurrencies are indeed securities. Bittrex was fined $50 million in 2022, and that was enough to shutter the firm’s operations. Bittrex was an established cryptocurrency exchange with a reputation for stability, but as I mentioned earlier there were few perks to users. Despite this, Bittrex has faced pressure from the cryptocurrency winter and SEC regulations aimed at securities marketing. When a cryptocurrency or asset becomes defined as a security, dealers and brokers of the asset must remain in compliance with SEC regulations that require infrastructure and control.
Bittrex closed their operations on April 30th, 2023. The SEC will likely be taking a more active role in the cryptocurrency space, and as cryptocurrency influencers and platforms face more scrutiny, expect more failures. Centralized exchanges are likely not the safe places to store your cryptocurrency, and the old adage of “not your keys, not your coins” is proving true. I believe more cryptocurrencies will be deemed “securities” by the SEC, and the result will be more regulation and more scrutiny which will lead to downward pressure on the space as a whole. I am concerned about Binance and Coinbase, and fear the space will face a prolonged cryptocurrency winter if we see either platform under pressure.
Sources:
https://www.investopedia.com/bittrex-exchange-bankruptcy-7495612Pixabay