The peer-to-peer exchange platform, LocalBitcoins, recorded a drop in the volume of Bitcoin trading. This could significantly affect the optimistic predictions that were made regarding the cryptocurrency by 2020.
LocalBitcoins is one of the most famous peer-to-peer exchange platforms in the world. Until now, the startup, based in Finland, had served not only as a means of exchange, but also as an indicator of the BTC market.
You can make an analysis of how the Bitcoin market is by simply analyzing the volume of transactions on this platform. You could even deduce at what level crypto adoption is in different regions. However, this time the data offered does not predict a too favorable future.
Drop in LocalBitcoins. Bad omen for the ecosystem?
In December 2019, several analysts said that 2020 would be the “year of Bitcoin.” The majority based their argument on the Halving of the cryptocurrency, which will take place in a couple of months. However, there are several factors that could show that 2020 is bringing more obstacles than benefits to BTC.
The first is the fall in the volume of transactions in LocalBitcoins. By the end of February, the platform sold only 3,144 BTC, its smallest amount of weekly trade since May 2013. In addition, it fell around 75% in the same period last year.
The apparent bad news could create the idea that the digital currency is entering a stage where it will present poor returns. This could imply that the optimistic predictions are not so true.
However, it is necessary to see the full picture before judging whether it is a bad omen for the cryptocurrency.
An expected obstacle
According to Veruska Xavier Filgueira, one of the LocalBitcoins correspondents, the BTC trade volume in dollars is similar to what the platform had at the beginning of 2017. He also added that:
“Some of the volume variations are due to the level of activity of the Bitcoins market itself, but our service already expected that the regulatory changes that occurred during 2019 will have an impact on the platform.”
Which means that the fall in the volume of transactions was a direct consequence of the new regulations for platforms such as LocalBitcoins.
Although this is his justification, there are other points to consider. For example, the fact that the numbers fell shortly after the platform suspended long-standing user accounts without prior notice. Although it is believed that this was the consequence of the new and strict regulations against money laundering in the European Union. What would bring the investigation back to the starting point: that it was all the fault of the regulations.
After the above, it could be concluded that the decrease in volume has to do with issues of the platform and not so much with the performance of Bitcoin. However, it is always good to stay informed about the cryptocurrency and its development.