The Slow Decline: What’s Happening to LocalBitcoins?
In a twist that has left many crypto enthusiasts scratching their heads (and probably their wallets), LocalBitcoins, the once-dominant peer-to-peer trading exchange, has seen its Bitcoin trading volumes drop to a seven-year low. Yes, you heard that right! Although you might expect a Friday night trading frenzy, the numbers tell a sad tale. During the week ending February 22, only 3,144 bitcoins changed hands on LocalBitcoins, which translates to around $28 million. That’s the lowest amount since May 2013. Yikes!
From 13,000 to 3,000: A Numbers Game
Let’s take a stroll down memory lane. Back in February 2019, LocalBitcoins was buzzing with activity, trading nearly 13,000 bitcoins per week. Fast forward to 2020, and it’s like watching a beloved show that’s been cancelled—viewership plummeted to about 3,000 bitcoins! To add some peanut butter to this jelly of information, the highest trading week on LocalBitcoins boasted a whopping 39,137 bitcoins. What happened?
The USD Perspective: A Mulligan?
Now, before you burst into tears thinking the sky is falling, let’s look at things from a USD perspective. The price of Bitcoin may be soaring, but trading volumes in actual cash have significantly reduced. The average trading volume in USD was about $50 million in 2019, but now sits at a meager $30 million. Back in December 2017, when Bitcoin was breaking records, LocalBitcoins raked in a jaw-dropping $129 million. Oh, how the tables have turned!
LocalBitcoins’ Response: Keep Calm and Carry On
Despite the decline in trading volumes, LocalBitcoins is keeping its chin up. Veruska Xavier Filgueira, a communications representative at LocalBitcoins, shared that they consider their current volumes to be akin to early 2017 figures. It’s business as usual for them. They’re optimistic about keeping pace with the ever-evolving Bitcoin community. Maybe they’re hanging a “We’re Not Worried” sign in the office?
Faced with FUD: The Compliance Conundrum
But not all is sunshine and rainbows. Recently, there’s been some bad press regarding the exchange’s account suspensions due to an “enhanced due diligence process.” This came to light in late January 2020 when some users found their accounts mysteriously suspended. Cointelegraph also noticed a significant dip in trading volumes from China, further intensifying the uncertainty surrounding the platform.
The Bigger Picture: Regulatory Pressures
While LocalBitcoins is officially registered with the Finnish Financial Services Authority, murmurs in the crypto community suggest it might be facilitating some questionable financial transactions due to lax regulations in other countries. The irony? A platform built on decentralization is facing scrutiny for its KYC/AML policies. Only time will tell if LocalBitcoins can right the ship while weathering this storm of uncertainty.
