(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 announced that it will be closing up shop by the end of February.
After more than ten years of facilitating P2P crypto transactions as Bitcoin architect Satoshi Nakamoto had envisioned, the crypto collapse that began in early 2022 proved to be too much for the platform.
“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 exchange wrote.
The Helsinki-based platform used to be quite popular among the crypto crowd, but it has seen engagement wane as more centralized and decentralized exchanges have come online offering access to more than just Bitcoin.
The platform specialized in P2P and escrow services for users looking to buy or sell bitcoin via traditional bank transfers and cash deals across multiple currencies on a global scale. In the early days of crypto, LocalBitcoins played a key role in helping drive liquidity for BTC.
In May 2021, the exchange expanded 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 did little to improve 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 substantially lower than the $100 million in weekly volume that it was recording back in 2017.
According to the timeline provided in the announcement, the platform has suspended new sign-ups as of today, and the suspension of trading on LocalBitcoins will take place on Feb. 16. The ability to use a LocalBitcoins wallet for anything besides withdrawing funds will also be suspended on Feb. 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, the announcement said. “The 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 that its closure might cause.
LocalBitcoins is far from the only crypto firm that has struggled to stay in business following the horror show that was 2022. Aside from the highly publicized bankruptcies of FTX, Genesis, Celsius, BlockFi, Voyager Digital, Three Arrows Capital and Core Scientific, several large exchanges, including Coinbase, Kraken, Bybit, Huobi, Blockchain.com, Crypto.com, and Luno, have announced massive layoffs and other cost cutting measures.
A recent GoinGecko study found that “crypto layoffs rose 8 to 13 times above average, in the months after major fallouts in 2022 and 2023.” June was the worst month of 2022, as the demise of Terra/Luna and the contagion that it caused resulted in a spike in layoffs to 3,003, which exceeded the average monthly rate by 13.4 times. Matters have only gotten worse in the new year, as “the number of crypto employees laid off in January 2023 alone represents 41% of the industry’s layoffs for the entire 2022,” CoinGecko said.
