Analysis of data from Poloniex’s exchange reveals a concerning trend, with over 500 trading pairs showing minimal to no trading volume.
Poloniex, an exchange acquired by Justin Sun in 2019, appears to be experiencing a significant lack of activity, with a majority of spot trading pairs listed on the platform seeing very little trading.
According to data from the exchange for spot trading pairs over the past 24 hours, 521 out of 981 pairs recorded less than $1 or even $0 in daily trading volume as of May 13, accounting for over 53% of all pairs listed.
A closer look at the data reveals a heavy reliance on USDT, the stablecoin issued by Tether, with 810 pairs on Poloniex tied to USDT, making up almost 83% of all spot trading pairs. In contrast, there are only eight spot trading pairs with Ethereum (ETH) and 72 with Bitcoin (BTC) on the exchange, representing approximately 0.816% and 7.34% respectively.
This heavy dependence on USDT raises concerns, especially following recent comments by Ripple CEO Brad Garlinghouse regarding potential regulatory scrutiny on Tether. While Tether’s Paolo Ardoino dismissed these rumors as FUD aimed at destabilizing the market, Poloniex could still face challenges if issues arise with USDT.
The absence of a USDT/USD trading pair on the platform means that a surge in USDT withdrawals due to regulatory pressure could potentially impact Poloniex’s operations, akin to a theoretical bank run.
Summary Review: The analysis of trading data from Poloniex highlights a significant proportion of trading pairs with minimal activity, raising concerns about the exchange’s overall health and functionality. The heavy reliance on USDT as the dominant trading pair, coupled with recent regulatory uncertainties surrounding Tether, adds to the apprehension regarding Poloniex’s stability. While the exchange has yet to provide a response to inquiries about these findings, the potential implications of a USDT-related issue on Poloniex’s operations underscore the importance of regulatory compliance and diversification in the cryptocurrency exchange landscape.
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