LocalBitcoins' Bitcoin Trading Volumes Plummet Amid Crypto Market Slowdown

Peer-to-peer bitcoin trading platform LocalBitcoins has seen its trading volumes drop to low the platform hadn’t seen since June of 2013, roughly a year after it first launched.

According to data from Coin.Dance, LocalBitcoins’ trading volume in BTC terms dropped to 4,595 bitcoin last week, a figure that hasn’t been since in over six years. A month ago LocalBitcoin’s trading volume was at 5,334 BTC.

During the 2017 bull run the peer-to-peer cryptocurrency exchange saw its volume surge to, during one week, over 28,000 BTC. Its peak trading volume was seen in 2015, however, when the exchange saw users trade over 38,000 BTC per week at one point.

LocalBitcoins' trading volumesSource: Coin.Dance

It’s worth pointing out that even though less BTC is being traded on the platform, its trading volume in USD terms grew steadily until early 2018, when a record $129 million were traded on LocalBitcoins during on week. Since then its volume dropped along with the price of bitcoin, to float around  $50 million a week.

In the beginning of the fourth quarter of this year, however, LocalBitcoins’ trading volume seems to have plummeted by around 30% when compared to last month, as last week around $38.4 million worth of BTC traded hands through it.

The platform’s trading volume seems to have dropped the most in Eastern Europe and Sub-Saharan Africa. LocalBitcoins is well-known for being a cryptocurrency on-ramp for users, and its trading volume often surges in areas affected by economic turmoil.

Trading volumes in the cryptocurrency space dropped in general in September when compared to August. According to CryptoCompare’s September 2019 Exchange Review.  

LocalBitcoins’ Competition and Security Breach

Earlier this month, it hit a milestone in Hong Kong amid the ongoing unrest and city-wide protesting. In Venezuela, its trading volume has kept on growing over the last few years, as the value of the country’s fiat currency, the bolivar keeps on dropping over hyperinflation.

LocalBitcoins’ recent drop in trading volumes may be related to its increasing competition, as peer-to-peer crypto exchange Hodl Hodl took advantage of it withdrawing from Iran by offering local traders a refuge.

The peer-to-peer cryptocurrency exchange might’ve also lost trading volume because earlier this year it had to implement a new identity verification system. Users had to verify their accounts until the beginning of this month, and non-verified accounts are no longer able to trade.

In January of this year, LocalBitcoins also revealed it was breached by an “unauthorized source” that saw users reportedly face a fake login prompt that stole their credentials.

Featured image via Pixabay.