Bitcoin exchange LocalBitcoins is set to close this month in response to the “ongoing very cold crypto winter.”
LocalBitcoins said in a statement on Thursday (February 9, 2023) that it was closing because it could not handle the bear market that was rocking the industry. Trading will be suspended on February 16, after which users will only be able to log in to withdraw their cryptocurrencies.
“We are sad to share, that regardless of our efforts to overcome challenges during the ongoing very cold crypto-winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service,” the company said in a statement.
Thus, a few years later, the popular P2P cryptocurrency platform joins the fleet and becomes the latest victim of the bear market. In addition to several bankruptcies of several insolvent companies, others have to cope with a shrinking workforce. Many exchanges, including some of the most well-known names like Coinbase, Bybit, Huobi, etc., have had to lay off thousands of employees over the past year.
Based in Helsinki, Localbitcoins is one of the longest running exchanges. According to Coindance, it started 10 years ago, and over the past four months, weekly trading volume has averaged between $5 million and $7 million, a far cry from 2017 when it spiked to more than $100 million for weeks.
LocalBitcoins provides peer-to-peer and escrow services for users looking to buy or sell bitcoin globally in multiple currencies through traditional bank transfers and cash transactions.
When Bitcoin was in its infancy, the exchange became a key marketplace for increasing liquidity. It has also spurred a lucrative arbitrage market, as users can sell bitcoin at a premium to the spot price and then buy the asset for a bargain on centralized exchanges.
In December, early bitcoin pioneer and libertarian activist Ian Freeman was put on trial on charges of using LocalBitcoins for a bitcoin sales deal.