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Recently, the upstart cryptocurrency exchange Bitunix announced that it had received an investment of $10 million, with sources claiming that the investor was from Dubai. However, the news did not elicit enthusiastic responses from the market.
In the past few years, platforms that have been running smoothly for years, such as Binance, Coinbase, Kraken and OKX, have firmly occupied the head of the market based on their early start-up advantages. Latecomers such as Bybit and Bitget have also established their brand and product beginning with derivatives after years of development. But although these platforms have been operating around the world for some time and have accumulated a lot of users and resources, and have relatively stable funding to maintain operations, they are still facing various compliance challenges from time to time. How can Bitunix, which has only just started, ensure and maintain compliance?
Moreover, Bitunix was born to face a huge challenge from market competition, which is like creating a search engine under the situation that Google and Bing dominate the global search market. Bitunix faces competitors who have accumulated a lot of capital and resources in their long-term development. How to break through the barriers to build up its own brand, products, and customer resources is the primary problem Bitunix has to solve.
In addition, with many other options that are available in the outside market, how could the newly founded Bitunix gain the trust of its users? Especially after the crash of Terra ($LUNA) last year, many platforms had various problems due to the lack of risk control management in asset management, including the famous top exchange FTX which eventually went bankrupt due to unauthorized misappropriation of customer assets and some other reasons. This has made investors more cautious when they are choosing platforms, especially for new crypto exchanges.
From an investor’s perspective, in the current market environment, it may be even better to invest by buying bitcoin than founding a new crypto exchange, simply for the sake of return on investment. At least investing in bitcoin may result in losses for a short period of time, but as the market stabilizes and capital flows in, there is hope for a return on capital in the long run.
For Bitunix, the $10 million in funding is indeed enough to support the team’s product launch and early operation. But how will the team break through the barriers to build up its product, brand, and compliance, and ensure stable operations for a long period of time, so that it can stand out from the crowd consisting of new and old branded crypto exchanges as an influential new platform in the industry? Where does the teams and investors’ confidence come from?
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Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
