Crypto researcher Haotian said the successive closures of BitMEX and BitMart should not be read as a simple sign of centralized exchange failures or as a signal that a new bull market is forming. In his view, the developments reflect an active shakeout driven by intensifying competition among centralized exchanges as compliance standards rise.
He said the core battleground for CEXs has shifted toward licensing, proof of reserves, and KYC/AML requirements. At the same time, exchanges are moving into tokenized U.S. equities and other traditional finance, or TradFi, assets in search of new revenue streams. Haotian added that this shift also means pricing power in traditional crypto trading is gradually slipping away.
For smaller exchanges, he said survival now depends on finding a differentiated position. That could mean focusing on licenses and localized services in specific regions, specializing in products such as TradFi assets, perpetuals, or RWAFi, or leaning fully into crypto-native narratives including DeFi, the Agentic Economy, and MEMEs. He said continued homogenous competition will only speed up the industry’s elimination cycle, though clearing out weaker players is not necessarily a bad thing.
On July 26, crypto researcher Haotian commented on the successive closures of BitMEX and BitMart, saying the situation should not be seen as a simple case of centralized exchanges failing and setting up a new bull market. He said it reflects an active shakeout caused by fierce competition among CEXs under a broader compliance trend.
According to Haotian, the competitive focus for centralized exchanges has shifted to licensing, proof of reserves, and compliance requirements such as KYC and AML. Exchanges are also pushing into tokenized U.S. equities and other traditional finance, or TradFi, assets to open new revenue streams. He said that shift also means pricing power in traditional crypto trading is gradually moving away from where it used to sit.
Smaller exchanges need a differentiated strategy
Haotian said small and mid-sized exchanges now have to find a clear niche if they want to survive. In his view, the available paths include:
- building around licenses in specific regions and localized services, while taking advantage of regulatory arbitrage;
- focusing on a defined product niche, such as TradFi assets, perpetuals, or RWAFi;
- fully embracing crypto-native narratives, including DeFi, the Agentic Economy, and MEMEs, and relying on the strength of crypto-native communities to make it through market cycles.
He added that no matter which route an exchange chooses, continuing with the same homogenous competition will only accelerate the washout. At the same time, he said that clearing out weaker competitors is not necessarily a bad outcome.
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