With its price dropping over 67% in the span of a month, Bitcoin has had quite the bumpy start to 2018. The digital currency, which caught the world’s attention when its price inflated to over $20,000 in January, just recorded sub-$7,000 levels today.
Zooming out to the larger picture, we notice that entire cryptocurrency market has been inundated by waves of red since the beginning of the year, thanks to the recurring FUD articles about government regulations, scams, and crypto-thefts. Nevertheless, all of these are not even close to the most pressing concern for one of the oldest cryptocurrency exchanges in the world.
In an interview with Business Insider, Miha Grcar, the head of business development at Bitstamp, admitted that “a talent shortage is hanging over the industry” as she refers to the inability of crypto-exchanges in dealing with the massive influx of trading activity at the beginning of January.
According to data from CoinMarketCap, the total volume of cryptocurrencies traded per day hit an all-time high of $71 billion January 4th after rising significantly in December. The 24-hour trading volume has been hovering between the $20 billion and $50 billion marks, causing a major demand for cryptocurrency exchange services as more and more people joined the market.
To put this into perspective, take a look at the statistics: mainstream exchanges like Coinbase were reported to be adding over 100,000 new users per day. China-based coin exchange, Binance was said to be adding over twice that amount, at 250,000 new users a day. Kraken, a US-based exchange, was also adding 50,000 new users a day at the end of December, according to Business Insider.
As a result, huge amounts of pressure were put on the relatively weak infrastructure of cryptocurrency exchanges. Often times, this led to outages that lasted for hours, days even. Kraken, for example, was forced to shut its doors for two straight days after its system suffered an outage in January.
Today, thanks to the relentless waves of FUD, the trading volume of cryptocurrencies has fallen back to pre-December volumes at $26 billion. “We are finally catching our breath,” Grcar said. She also added that although cryptocurrency exchanges have extensively built their infrastructure to support the increasing market demand, constant upgrades have to be made to deal with the scalability issue. And these upgrades require talent.
“Globally, the pool of talent — people with experience in blockchain and distributed-ledger technology — is somewhat limited,” Grcar said. “This is a big challenge.”
Furthermore, cryptocurrency exchanges will also have to compete with some of the largest, way more established financial institutions in the world such as JPMorgan and Citigroup, which have started actively hiring people with experience in blockchain, the technology behind cryptocurrencies like Bitcoin.
According to Bloomberg, the amount of cryptocurrency or blockchain job postings on LinkedIn has quadrupled in 2017.
Nonetheless, Grcar is optimistic about the future prospects for cryptocurrency exchanges across the world. “We see more exciting times on the horizon,” she said.
Featured Image Source: Forbes