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The Biggest Trading Challenges in Cryptocurrency Exchanges


  • With more than 200 cryptocurrency exchanges operating today, crypto trading is a growing trend
  • Due to unfavorable media coverage and the recurring problems and difficulties exchanges face, many individuals are reluctant to begin utilizing cryptocurrency exchanges. However, there are solutions within the bitcoin exchange sector
  • Some of the most frequent issues traders have with crypto exchanges include lack of security, lack of liquidity, and exorbitant trading costs

The crypto industry is constantly evolving, but there are still some challenges that it has to tackle for institutional adoption. Crypto exchanges do have issues, many of which can ultimately hurt users. 

We’ve highlighted some of the biggest challenges that traders face when dealing with cryptocurrency exchanges. Irrefutably, lack of security stands at the top, followed by other issues like high trading fees, liquidity fragmentation, and more. 

Lack of security/hacking risks

Security hacks and breaches are frequent in the industry and frightening for users. This is concerning for crypto platform owners because it implies that personal information may be stolen or compromised. In addition, fraud and scams that cause people to lose life-changing sums of money must be addressed to safeguard those who invest in coins.

Two-factor authentication is an established and widely used security technique that asks users to provide their email address and/or phone number when signing up. o further verify the user’s identity, the exchange sends them a text message or an email with a code to input when logging in.

Another choice is cold storage, which ensures consumer data  isn’t altered by securely storing data offline. To complete a transaction, several cryptocurrencies require multiple signatures from exchanges. The user would have time to stop any further advancement if a hacker were to gain access to the exchange’s computers.

High trading fee

For many cryptocurrency exchanges, high trading costs are the standard. Even if a trader is trading at a loss, a certain portion of their order activity is taken as commission for every transaction they make on an exchange. Thus, without the community receiving a portion, this becomes a revenue-generating alternative for exchanges.

Incentivising participation is the best approach to combat high fees and keep paying clients. For example, a trader could introduce a referral or profit-sharing program to include individuals around them and profit from an exchange. 

Lack of liquidity

Market liquidity is crucial for several reasons, as it affects how quickly investors can initiate and close positions. Since there is always someone prepared to take the opposing side of a particular position, a liquid market is often linked with lower risk. This might draw in speculators and investors, enhancing the market’s favorable conditions. 

Due to a significant increase in bitcoin transactions, the value of these transactions has decreased, causing both small and major exchanges to experience declining liquidity. Server lag times at exchanges and other technical concerns are worsening. As a result, these issues threaten the continued operation of exchanges with a decreasing user base. 

Exchanges can work together and utilize a collective pool server, which consists of an order book shared by a number of exchanges, to resolve this ongoing issue. This way,transactions may still be completed by using the collective pool even if one exchange is short on liquidity.

Centralized exchanges enable almost 99 percent of all cryptocurrency transactions, suggesting that they are responsible for the vast majority of trading activity. However, decentralized exchanges sometimes lack liquidity owing to a lack of volume, making it challenging to locate buyers and sellers when trading volumes are low.

Lack of customer support

Crypto users immediately turn to customer care for guidance or settlement of their concerns when they have problems with anything on the platform or want to learn more about user benefits. Many cryptocurrency platforms lack adequate resources for customer care because too many expanding exchanges don’t scale up their capabilities for the number of consumers they serve.

Some exchanges deal with this by using a customer care provider that can deal with several enquiries and fix issues without entirely depleting the company’s assets and workforce.

Inconvenient user interface

Today, every platform must be user-friendly if it wants to provide the best possible user experience. For example, customers will search elsewhere if a website is challenging to use, with intricate pages and visitors having to scroll down to locate what they need.

The solution is a one-page interface, which makes everything available from a single location and enables users to view both the order book and market charts necessary to complete a transaction. Furthermore, by making things simpler for the user, the exchange will find it simpler to provide an enhanced customer experience.  

High withdrawal rates

Anyone that has ever traded on exchanges would have come across hefty withdrawal fees, especially when  wanting to withdraw coins andmove them to another exchange.

During a withdrawal, numerous elements are at play. Transactions on the majority of blockchains need a mandatory transaction fee at the protocol level, whereas cash withdrawals from ATMs do not. To stop users from spamming the network, this charge is required. Unfortunately, this charge is subject to change based on several factors.

FLUID aims to tackle these issues and more

Whether you are an institutional or retail virtual asset trader, you want to make sure the platform you are trading on has the lowest latency and fees and holds the highest standards for securing its traders. Unfortunately, today, this is not the case. 

This is where FLUID comes in. FLUID has a faster and more secure infrastructure that is designed with future regulatory compliance requirements in mind. It will also benefit investors by allowing them to trade high volumes of bitcoins and altcoins without impacting the price and affecting the market at ultra-low costs. Our infrastructure’s efficiency allows us to provide our customers with some of the lowest fees in the industry. We own our liquidity and leverage it to make orders that are reflected in FLUID’s order book.