Business • June 10, 2019, 2:35PM EDT

Regulatory pressure has humbled the once-mighty Bittrex and Poloniex, leaving Binance to rise

Quick Take

Bittrex and Poloniex have seen large drops in their marketshares since the bull run of 2017, when they were leading platforms for altcoin speculation
Their positions as U.S.-based exchanges could continue to hurt business as they play catch-up with the country’s regulations and feel pressure to delist assets
In contrast, Binance seems to be thriving without the added pressure to live up to U.S. standards

“Oh, how the mighty heroes have fallen! Stripped of their weapons, they lie dead.”

This passage from the Second Book of Samuel recounts David’s lamentation over the tragic deaths of Jewish heroes Saul and Jonathan. As described in 2 Samuel, the military veterans, who were once mightier than lions and swifter than eagles, perished tragically: Jonathan in battle and Saul by suicide.

Today, dear reader, in this Mad Crypto column I offer you my own lamentation over the downfall of two once-mighty exchanges: Poloniex and Bittrex.

“Poloniex and Bittrex, once beloved by traders in their early life, now command but a meager share of the market; they were swifter than eagles, stronger than lions … How the mighty have fallen in the midst of the crypto exchange battle.”

Indeed, Bittrex’s share of the market fell from 30% in August 2017 to 2.4% in May 2019. Poloniex slipped from 58% in April 2017 to 1.3% today.

Bittrex and Poloniex were stars of the 2017 bull run, providing traders a platform to tap into the wild speculation sweeping alt-coin markets at the time. As prices declined, and volumes for assets outside of the top 10 collapsed to near zero, Poloniex and Bittrex saw their market share collapse.

Alas, it is unlikely that Poloniex and Bittrex will ever again see the market share they enjoyed in 2017.

Binance, the new kid in town, is king among the alt traders and its massive liquidity will be nearly impossible for Poloniex and Bittrex to tap into, especially while facing pressure at home to delist assets. Unlike Binance, which has mastered regulatory arbitrage, Bittrex and Poloniex have to answer to the regulators of their native land.

“Today’s action is a result of regulatory uncertainty in the US market,” Poloniex said in a May blog post announcing the delisting of nine assets in the U.S. “Specifically, it is not possible to be certain whether US regulators will consider these assets to be securities.”

Bittrex quietly announced over the weekend that they would be geo-fencing 32 cryptocurrencies from their U.S. clients, following Poloniex. Bittrex also has its own beef with the NYDFS to deal with.

Meanwhile, Binance continues to list more assets as its initial exchange offering platform becomes more popular. Its command over the market stands at a sturdy 60%.