Huobi Exchange faces declining volume, regulations, and market exits, necessitating compliance focus, platform improvements, marketing revitalization, and strategic partnerships for recovery.
Huobi Exchange, previously a prominent player in the cryptocurrency market, had once boasted a daily trading volume exceeding $2 billion and held the third position in terms of overall trading activity.
However, the recent trajectory of Huobi indicates a loss of momentum. Recent reports and data shared by Willy Woo, a recognized cryptocurrency expert on Twitter, suggest that the exchange has encountered a substantial decrease in transaction volume and a decline in web traffic over the past few months.
Significant Drop In Balances Signals Trouble For Huobi Exchange
The significant drop in balances held on the Huobi exchange is also noteworthy. Crypto holdings on the platform have diminished by over 90% since late 2020, indicating a substantial withdrawal of users’ assets from the exchange.
For example, Bitcoin reserves have plummeted from 410,000 BTC in 2022 to a mere 26,000 BTC at present. CoinGlass data supports this observation, revealing that Huobi currently retains approximately 16,400 BTC on its balance sheet.
Huobi exchange looks like it’s a slow-moving train wreck, nearing its final throws.
Collateral has been draining since 2020. Bitcoin balance is down from 410,000 BTC (2022) now only 26,000 BTC left. ETH and USDT balances also flatlining.
ETH and USDT balances have also been plummeting, experiencing a decline in quantity. Woo highlights that these collateral holdings have been steadily decreasing since 2020. In his tweet, Woo captioned, “Huobi exchange is appearing like a slow-moving disaster, nearing its final stages.”
The level of an exchange’s liquidity can be inferred from the amount of balance it possesses. A higher quantity of cryptocurrencies held on an exchange signifies greater liquidity for buying and selling tokens. Conversely, a relatively low amount of cryptocurrency stored on an exchange indicates a smaller pool of liquidity.
Declining Web Traffic Adds To Huobi’s Challenges
Web traffic for the crypto exchange has also been sharply declining. Woo shared screenshots from SimilarWeb, an analytics platform for web traffic, revealing a significant drop in visits to Huobi.com. The number of visits decreased from over 30 million in March to just over 2 million in May.
Huobi has been facing challenges due to regulatory concerns and intensified competition within the cryptocurrency exchange industry, resulting in its expulsion from multiple countries in recent months.
In a recent development, the Malaysian Securities Commission issued an order for Huobi to halt its operations in Malaysia. This exit from the Malaysian market has had an impact on the exchange’s user base, as Malaysia is recognized as one of the leading countries in Asia with significant adoption of cryptocurrencies.
As of 2023, approximately 23% of Malaysians are reported to own or utilize crypto, highlighting the significance of the market Huobi had to withdraw from.
Huobi’s top web traffic is now via Russia, India, Korea, and Ukraine. It’s been forced to shut down in many jurisdictions due to non-compliance.
As per Coinmarketcap’s rankings, Huobi currently holds the 14th position in terms of traffic, liquidity, and trading volumes. In order to reverse the situation, the exchange needs to prioritize compliance, enhance its platform, reinvigorate marketing initiatives, forge new partnerships, and provide compelling incentives for users to return to their platform.