Bitcoin is down 45% this year — but that’s not what’s worrying cryptocurrency exchanges

Bitcoin, Members of Japan's idol group Kim
Kyung Hoon/Reuters

  • Bitcoin is experiencing a rough start to 2018, but
    that’s not the biggest concern for a developer at one of the
    world’s oldest cryptocurrency exchanges.
  • A talent shortage is hanging over the industry, Miha
    Grcar, the head of business development at Bitstamp, told
    Business Insider.

The cryptocurrency markets are awash in a sea of red, but that’s
not a concern for one of the oldest cryptocurrency exchanges.

Bitcoin has had a terrible start to the year. The digital
currency, which gripped the world’s attention when it soared
close to $20,000 a coin in December, is down 45% since the
beginning of 2018.

As for trading action, volumes across the market for digital
currency have decreased since crypto mania peaked at the end of
last year.

But this is a much-needed break for cryptocurrency exchanges,
which needed to shepherd a niche market into the mainstream.

“We are finally catching our breath,” Miha Grcar, the head of
business development at Bitstamp, a Luxembourg-based exchange
founded in 2011, told Business Insider during a phone interview.

According to the cryptocurrency data site,
24-hour trading volumes have been in the range of $20 billion to
$30 billion since the beginning of February, down from an
all-time high above $70 billion on January 4.

The record-breaking volumes of December and early January put
intense pressure on the weak infrastructure of cryptocurrency
exchanges, leading to hours- and days-long outages. Many even had
to close the door to new customers, as
Business Insider first reported

Cryptocurrency volumes
took off in December.


“We saw an influx of customers,” Grcar said. “The challenges we
faced were also faced by our competitors.”

Kraken, a US-based exchange, was adding 50,000 new users a day at
the end of December, a person familiar with the company’s
operations told Business Insider. In January, the company
witnessed a two-day outage.

To handle the demand in the market, cryptocurrency exchanges
extensively built out their infrastructures.

But such upgrades require talent that is in short supply,
according to Grcar, who told Business Insider that a talent
shortage, not a bitcoin bear market, was the big concern hanging
over the head of cryptocurrency companies.

“Globally, the pool of talent — people with experience in
blockchain and distributed-ledger technology — is somewhat
limited,” Grcar said. “This is a big challenge.”

It’s not just cryptocurrency exchanges going after such talent —
companies like Bitstamp and Kraken have to go head-to-head with
some of the largest financial firms in the world, including the
likes of JPMorgan and Citigroup, which have posted job listings
seeking people with experience in blockchain, the technology
behind cryptocurrencies like bitcoin.

The number of blockchain or cryptocurrency job postings on
LinkedIn increased
fourfold in 2017
, Bloomberg noted.

A headhunter who asked not to be identified told Business Insider
that “JPMorgan has a team, but it is not defined how companies
can utilize and monetize it yet.”

Still, he said, there are fewer folks with expertise in the
space, so they are harder to find. Grcar added that “everyone is
facing this these days.”

As for the bitcoin bear market, Grcar said it was experiencing a
brief pause.

“We see more exciting times on the horizon,” Grcar said.

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