End of an era: LocalBitcoins to discontinue its service by February

End of an era: LocalBitcoins to discontinue its service by February

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(Kitco News) – It’s the end of an era for the crypto community as LocalBitcoins, one of the oldest peer-to-peer (P2P) Bitcoin (BTC) exchanges in the world, has announcement that it will close its doors by the end of February.

After more than a decade of facilitating P2P crypto transactions as envisioned by Bitcoin architect Satoshi Nakamoto, the crypto meltdown that began in early 2022 proved too much for the platform.

“Regardless of our efforts to overcome challenges during the ongoing very cold crypto winter, we have unfortunately concluded that LocalBitcoins can no longer provide its Bitcoin trading service,” the exchange wrote.

The Helsinki-based platform was once hugely popular among the crypto crowd, but has seen engagement dwindle as more centralized and decentralized exchanges have come online offering access to more than just Bitcoin.

The platform specializing in P2P and escrow services for users looking to buy or sell bitcoin via traditional bank transfers and cash transactions in multiple currencies globally. In the early days of crypto, LocalBitcoins played a key role in helping generate liquidity for BTC.

In May 2021, the exchange extended it services by adding Tether (USDT), Polkadot (DOT), Cardano (ADA), Bitcoin Cash (BCH), USD Coin (USDC), Chainlink (LINK) and Dogecoin (DOGE) as payment methods, but this has not little improved the amount of revenue the platform was able to generate.

Data provided by CoinDance shows that over the past four months, the exchange has averaged between $5 million and $7 million in weekly trading volume, which is significantly lower than the $100 million weekly volume it was recording in 2017.

According to the schedule provided in the announcement, the platform suspended new registrations starting today, and the suspension of trading on LocalBitcoins will take place on February 16. The ability to use a LocalBitcoins wallet for anything other than withdrawing funds will also be suspended on February 16.

Current customers now have 12 months to withdraw their funds, but the exchange has encouraged them to do so sooner. After Feb. 17, users will only be able to log in to withdraw their Bitcoins, according to the announcement. “Trading and wallet services will no longer be available at this point.”

The exchange thanked its users for choosing LocalBitcoins for the past ten years and apologized for any inconvenience its shutdown may cause.

LocalBitcoins is far from the only crypto company that has struggled to stay in business after the horror show of 2022. Aside from the high-profile bankruptcies of FTX, Genesis, Celsius, BlockFi, digital travel, Capital of the Three Arrows And Basic scientistseveral major stock exchanges, including Coinbase, krakenper bit, HoubiBlockchain.com, Crypto.com and Luno, announced massive layoffs and other cost-cutting measures.

A recent GoinGecko study found that “crypto layoffs increased 8-13 times above average, in the months following the major fallout in 2022 and 2023.” June was the worst month of 2022, as the demise of Terra/Luna and the contagion it caused caused layoffs to spike to 3,003, which exceeded the average monthly rate by 13.4 times. Things only got worse in the new year, as “the number of crypto employees laid off in January 2023 alone accounts for 41% of industry layoffs for all of 2022,” said CoinGecko.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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