In response to declining exchange volumes, crypto exchanges KuCoin and ByBit are introducing new strategies to generate revenue and engage their customer base. ByBit is rolling out the Double-Win feature, allowing customers to capitalize on substantial price fluctuations in the crypto market.
This means traders can profit when the current asset price differs from a predefined settlement price. This feature caters to short-term traders looking to maximize their returns during volatile market movements.
KuCoin, on the other hand, is introducing Pre-Market trading, providing peer-to-peer access to up-and-coming tokens. This feature enables customers to lock in buying and selling prices for over-the-counter (OTC) trading, and the settlement process doesn’t require platform intervention.
For those using KuCoin’s Pre-Market product, a security deposit is required to place or fulfill orders as buyers or sellers. Failure to meet these obligations results in the forfeiture of the security deposit. While KuCoin made Know Your Customer (KYC) checks mandatory, there are still potential risks associated with trading tokens that haven’t been listed, such as rug pulls and poor tokenomics.
It’s crucial for investors to conduct proper due diligence when engaging with these new features, as they can expose them to increased market risk.
ByBit is in the process of obtaining a full market license from Dubai’s Virtual Assets Regulatory Authority, aiming to broaden its customer base beyond accredited investors. While this expansion may open new opportunities, it could also create challenges for retail traders less experienced in high-speed, professional trading strategies.
These innovations come at a time when retail traders are grappling with a volatile crypto market, waiting for institutional involvement to inject much-needed liquidity. In thinly traded markets like cryptocurrencies, smaller transactions can have a more significant impact on asset prices compared to deeply liquid markets.
Furthermore, rising interest rates can influence crypto trading, particularly when customers use borrowed funds to finance their trades. In such circumstances, individuals may opt for lower-risk investments such as bonds while monitoring the US Federal Reserve’s tightening cycle.
The crypto industry also faces scrutiny from governments and regulators, particularly in the wake of reports that cryptocurrencies were used by organizations like Hamas. US Senators Elizabeth Warren and Sherrod Brown, along with other lawmakers, have called for a prompt government response and investigations into the role of crypto in recent events.
The evolving landscape of the crypto market continues to present new opportunities and challenges, requiring vigilance and due diligence from all market participants.