Posted 1 year ago | by Ben Armstrong
Poloniex and the Altcoin Purge
Poloniex is a major crypto exchange, and it was purchased by Circle in February 2018 which made numerous changes to the platform. Poloniex recently announced that they have removed some kind of cryptocurrencies from their platform, including DigiByte (DGB), Factom (FCT), MaidSafeCoin (MAID), Omni (OMNI), Primecoin (XPM), Vertcoin (VTC), and Viacoin (VIA).
To explain why it decided to delist these Altcoins, the exchange said in a blog post that it is trying to, “improve the performance of the exchange and to better serve our customers.”
DigiByte (DGB) is the largest among the aforementioned tokens, with a $75 million market cap that made it the 55th largest cryptocurrency at the time of delisting. Another cryptocurrency that has been delisted is Omni (OMNI), and was seen as the first Initial Coin Offering (ICO), as well as the blockchain that spawned Tether (USDT).
Poloniex also informed that they so far will delist certain assets from time to time in order to, “provide customers with access to the most innovative projects that fuel the industry and to ensure the assets meet the high standards of our customers.”
Not Much Info from Poloniex
Poloniex did not give specific justifications for why delisting each individual token made sense, but it seems signal that some of these projects are being delisted because they face lower development, low trading volume, or compromised security on the network.
The dwindling trading volume among smaller altcoins comes about as the crypto markets face a downdraft, and what appears to be a continuation of the bear market that began in late 2017. This market cycle has all but eradicated the cyclical parabolic trends that were previously seen by many of these smaller assets.
Another Bull Market Coming?
Investors have been being waiting for another bull market to begin in smaller crypto assets. In 2017 the run-up in Bitcoin led to some smaller altcoins blasting higher, and creating amazing gains for anyone who was smart enough to sell.
However, a new bull market has not started. The crypto markets face a winter market with many altcoins have dropping virtually to nothing, which leads them to be prime targets for delisting at major exchanges.
One of popular figures within the cryptocurrency industry, Nic Carter, spoke about the Poloniex purge in a recently tweet:
Also - more eveidence that old altcoins don’t pump in consecutive cycles (with very few exceptions), they just get churned out. New alts take their place. But the net effect is investors lose
— nic carter (@nic__carter) December 21, 2019
It is probable that cryptocurrency exchanges will keep delisting tokens which do not have much interest from investors. Once delisted, it is much harder for a project to keep going, or generate a positive news flow.