Poloniex Spins Out From Circle - The Infamous Exchange Stumbles Again
Oh, how the mighty have fallen.
Once ordained the leading cryptocurrency exchange in the US, Poloniex has since written the playbook on how to slide from public favor in the most spectacular of fashions.
The deterioration of the exchange is nothing but self inflicted. Slowly bleeding the exchange from the cold dead hands of the owners.
Let’s take it back a few years.
I remember the first time I started trading on Poloniex. It was May 2017. The exchange was gaining momentum as the 2017 bull market was taking shape.
Poloniex got big. Like BIG big. Hundreds of thousands of traders were bustling on the exchange with a healthy sense of optimism. It was a magical time for the crypto market and Poloniex.
But…
Support tickets started going unanswered. The exchange became far more focused on scaling than customer support. This caused issues to persist for months as the exchange fought to keep everyone online.
By 2018, Poloniex had racked up over 140,000 unanswered support tickets. Users were furious and the internet became flooded with horror stories of traders losing access to their funds.
Getting bought out by Circle was their best shot at redemption. Some even thought this would inspire a new wave of greatness for the exchange.
Yet…
Circle only brought more of the same. The support tickets got answered, but not much else. The site still remained identical to the day they purchased Poloniex. But with features stripped from US customers to comply with speculative regulations.
Poloniex continued to decline as Circle thrashed with how to manage the exchange. Removing features, then re-enabling features, and so on. It became a confusing situation for everyone involved.
Only Two Months
There are only a couple months for US customers to wrap up their business on the exchange and take their funds elsewhere.
Trading Stops
On Nobember 1, 2019, all trading will stop for US customers. It also seems as though the funds left on the exchange after this time will be moved to Circle.
Funds Disappear?
Investors only have until December 15th of this year to withdraw all of their funds.
In a statement made by Circle:
“When trading ends, US customers will still be able to withdraw their assets through Circle until at least December 15, 2019.”
That sounds like leaving your funds on the exchange after December 15th will mean they are completely lost. Instantly becoming the property of Circle (we can only assume).
Now, I’m not saying this is abhorrent, but I would say it’s a synonym - repulsive, despicable, loathsome. Only giving people two months notice to move their funds, otherwise they are gone.
This just fits perfectly into the downward trend Poloniex has cleared for themselves.
Unanswered Questions
Many questions have gone unanswered. For the nearly 2 years since the Circle acquisition, we still manage to not see any clear vision for Poloniex in sight.
How will they compete internationally?
Internationally, investors have a large selection of exchanges. These exchanges have dominated foreign markets for several years now and don’t show any signs of stopping. Binance for example, the behemoth of crypto, will become a more direct competitor to Poloniex.
Being a somewhat trusted exchange in the US market may have been the only advantage they had over international exchanges. With this change in strategy, there’s no clear way for Poloniex to compete.
How will they grow?
Poloniex has been slow moving over the last years. Few new features have been added. Listings happen at a snails pace, marketing is atrocious, and so much more.
Although they have claimed in a recent blog post that this will “free them to focus on the needs of global crypto traders with new features, assets and services”, only time will tell if that’s possible.
The exchange has gone through extended stagnation since the acquisition by Circle. Management needs to realize that in order to compete, they need to move faster. This may be their last shot at redemption.
When will the game of “hot potato” end?
Passing Poloniex around like a hot potato can only last for so long. Eventually, nobody will want to play the pawn that killed Poloniex. It’s time we realize the redemption story just isn’t happening. The exchange has suffered severe blemishes from previous failings.
It may not be possible to cover up the marks. The people have already seen the true face of Poloniex and shuffling around management may not make enough difference.
At this point, it may be better to start a new exchange from scratch than invest another $100M into propping up the dead skeleton of a once great exchange.
Conclusion
What’s most likely going to happen? Within the next 2 years, we will look back at this moment and be like “yea, Poloniex sealed their fate on October 18, 2019”.
Their prospects are narrowing as they fight for their final breaths. Circle didn’t know what to do with the exchange and I expect their new owners also won’t know what to do with the exchange.
Poloniex has a lot of history in the cryptocurrency space, so it’s hard to see them go this way. It was my go-to exchange in mid 2017. Today, I watch the death of a honorable soldier. One who pushed the cryptocurrency market forward. We salute you Poloniex.
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