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One of the biggest cryptocurrency exchanges, Gemini, plans to cease its service for some cryptocurrencies, including LUNC, SNX, QRDO, and ZBC. After such a tip for discussion in the nearest month, attention has been ignited, and users holding the same assets have felt disturbed by such a measure. That should be clarified to all stakeholders in the crypto market in terms of the reasons behind such a move and its consequent wider implications.
LUNC ( Terra Classic)
The proprietary coin used on the Terra blockchain is LUNA or Terra Classic. Of course, Terra made a huge case in the crypto space due to its algorithmic stablecoin, UST. But UST dipped; its downfall was that of Terra's. It was unable to keep its balance, which caused irreparable damage to the reputation and value of LUNA. Although it is pegged by re-attempts at revival, the market position of LUNA did not resurrect, which was reflected in the huge drop in both trading volumes and investor interest.
SNX (Synthetix)
SNX is the native token to Synthetix, a DeFi platform for exchanging synthetic assets. It was among the first projects operating in the DeFi space that allowed users to trade derivatives as well as other financial instruments in a truly decentralized manner. Over time, however, SNX has succumbed to falling liquidity and volumes. Most likely, the decline in market activity led to Gemini's decision to delist the token.
QRDO
An in-house Qredo Network token providing decentralized custody, liquidity, and settlements. Qredo was able to gain great interest in the crypto space by providing an aggressive approach towards DeFi and the Digital Asset management space. The QRDO token has so far failed to gain wider recognition and failed to experience any significant trading activity on the big exchanges. As a result, dull performance landed it on the list of Gemini exchanges for potential delisting.
ZBC (Zebec Protocol)
ZBC is the token for Zebec Protocol, a continuous settlement protocol built for real-time and continuous streams of payments. If anything much will change payment systems, it will be the eventual tech that Zebec develops with instant and continuous transactions. But, like QRDO, the ZBC has been unable to attract market attention and trading volume, so Gemini will delist it.
There are a variety of factors that likely weigh into Gemini's discovery or decision to end support for these cryptocurrencies. In understanding these factors, one does get a sneak peek inside the inner mechanics of cryptocurrency exchanges and the many considerations they have to juggle.
Low Trading Volume
The major reasons why tokens are delisted are due to their low trading volumes. Low trading volumes translate to small amounts of money that an exchange like Gemini would collect. It also means less liquidity. A significant reduction in the volume of trade for cryptocurrency inconveniences supporting the same by an exchange.
Low trading volumes constitute states of price volatility, and thus users are not able to successfully vend or purchase their assets at constant prices. What matters to Gemini is ensuring a platform that has high liquidity and very active markets; the removal of tokens with low trading volumes serves exactly that purpose.
Regulatory Concerns
The regulation concerning digital assets is altering at a breakneck speed, with several governments and regulatory authorities coming up with fresh rules and regulations.
Carefully directing through all of these regulations is the primary need for a cryptocurrency exchange toward ensuring due harmony while preventing deviations concerning them.
In some instances, some tokens could be a potential regulatory risk because of their structure, use case, or very close association with controversial projects. In such cases, Gemini might decide to delist such tokens so as not to involve itself so deeply in the development of possible legal challenges, for the business work to be conducted within the law.
Project Sustainability
A few other critical factors that exchange checks are the long-term view for a project. For a dead, underdeveloped, or even sick project by interest, long-term, a severe criterion behind the listing on a large exchange wouldn't be worth further continuation in such. Gemini probably checked the status of the development and community engagement of the projects that are behind LUNC, SNX, QRDO, and ZBC and thought that they fell short of the criteria that the exchange set for further support.
Market Reputation
Every cryptocurrency exchange has to be mindful of good market repute. Delisting tokens that represent dead and dying projects, Gemini consolidates its position within the market and assures users that it gives exposure to more reliable and trustworthy assets. This helps Gemini retain its reputation as a safe and reputable platform for the trading of cryptocurrencies.
Reclassification of Delisted Cryptocurrencies
This could have very serious implications for the cryptocurrencies themselves and their respective communities in case Gemini decides to delist them. Being delisted from major exchanges usually results in a fall in market confidence and trading volumes, which further depresses the price of the token.
Price Impact and Market Sentiment
The fact that the delisting of a crypto asset from a major exchange like Gemini helps its price plunge has nearly become a truism in the market. Probably, the reason is that selling pressure surges temporarily just before the actual delisting when some investors try to rush to sell their holdings. A token that is delisted has lower visibility and lower trading opportunities in the long run; that is why it will lose market value in the long run.
Community Reaction
News of the delisting is hence likely to draw some strong reactions from members of the respective communities of the tokens. While it may represent a major downfall to some, especially in its reliance on Gemini as one of its primary platforms for trading and liquidity, it can drive discussions within the community in terms of the prospects of the project and whether or not it can survive without the backing from big exchanges.
Potential for Relisting
Although delisting is mostly an event with a negative perception, it doesn't have to be the end for a cryptocurrency.
Sometimes, when a token performs better in the market and is compliant with the regulation or undergoes further developments of its project, it may get a second chance at listing. This would be possible only if the project team and the community were making major efforts to resolve the problems that led to the delisting.
This is one of the decisions made by the Gemini firm to delist these selected tokens as part of the overall strategy of maintaining a quality and secure trading platform for various users. If Gemini were to focus on tokens with good market performance, following the regulations, the trading platform would be much safer and more reliable for the user.
User Impact
Effectively, users holding LUNC, SNX, QRDO, and ZBC will have to key out the assets before the time of delisting to another wallet or an exchange. In other words, doing nothing will imply the loss of such tokens on the Gemini platform. It urges users to take a look through their holdings to attempt the right repositioning of their investments.
Quality Focused Strategy
At the base of this strategic profile of quality over quantity is the replacement of these tokens on the Gemini exchange. Developing a roster of cryptocurrencies that speak to a high threshold of both market performance and regulatory compliance, Gemini can start to remove itself from other exchanges that look and sound this way. This quality assurance can drive trust from users and attract serious investors to the works.
The fact that Gemini delisted such tokens could create a precedent across cryptocurrency markets. This could potentially be the first step toward increasing selectivity toward listings, with a refocusing only on those tokens which could probably show impressive market performance and regulatory compliance, in addition to robust project development.
Closer Scrutiny on Cryptocurrencies
The more mature the cryptocurrency market becomes, the more demanding exchanges become in terms of the tokens they list. This scrutiny may introduce fewer tradeable digital assets to major exchanges, especially for those that don't meet criteria concerning liquidity, compliance, and project feasibility. For less significant or less-established cryptocurrencies, this may provide additional woes in terms of visibility and drawing in investors.
Market Consolidation
The delisting of underperforming tokens could encourage market consolidation in which a few high-quality cryptocurrencies capture the market. That could conceivably produce a more predictable and less volatile trading environment, although it dampens opportunities for more speculative investments in newer or more experimental projects.
Impacts on Other Exchanges
Such a move to delist these tokens by Gemini may go further to bring the same enthusiasm at other neighboring exchanges to think about delisting. This should be followed by other giant exchanges in turn and have a pull and push effect throughout the cryptocurrency market, and more delisting would be witnessed with more stringent observations on compliance and performance.
That's how being at the top of your game as a cryptocurrency investor demands knowledge about how to get ready for a prospective delisting. So, here are the steps you should take if you are holding a cryptocurrency that is likely to be delisted.
a. Announcements by the Exchange
Always keep checking the announcement pages of exchanges you're trading on. Most of the time, exchanges will give pre-notice of delisting, so you would have time to act upon it.
b. Early Transfer of Assets
If there is an announcement for delisting, take into account that it will be wise to make arrangements for switching your assets to another exchange or a private wallet in advance. This will lower the possibility of suffering from any delay or other technical issues because of a last-minute rush.
It includes distributing a portfolio among different cryptocurrencies and exchanges to reduce any significant losses due to delisting. Hence, this strategy allows one to overcome the risk of delisting an asset.
Gemini has announced that it no longer supports LUNC, SNX, QRDO, and ZBC to better maintain quality and security on the platform.
Even though not very good news to holders of these tokens, it gives a vivid picture of the commitment this exchange gives to bringing forth a safe and secure trading environment. This implies that such decisions would often overcome/prevail over a period as long as one can imagine this in the cryptocurrency market, hence the importance of thorough research before investing in any form of digital asset.
What is important for the investors is to be informed and ready concerning the market. Any investor who realizes why listings drop and who is ready ahead of time to protect their assets may become more confident in the challenges of the cryptocurrency market.
1. What happens to my LUNC, SNX, QRDO, and ZBC tokens after delisting?
You will need to transfer your tokens to another exchange or private wallet before the delisting takes effect to avoid losing access to them on Gemini.
2. Can delisted cryptocurrencies be relisted in the future?
Yes, but relisting typically requires the project to address the issues that led to the delisting, such as improving market performance or regulatory compliance.
3. Why does Gemini delist cryptocurrencies?
Gemini delists cryptocurrencies that have low trading volume, regulatory risks, or declining project viability to maintain a high-quality trading platform.
4. How can I avoid investing in cryptocurrencies that might be delisted?
Conduct thorough research on the project's viability, trading volume, and regulatory status before investing. Diversify your portfolio to mitigate risks.
5. What should I do if a cryptocurrency I own is being delisted?
Transfer your assets to another exchange or private wallet as soon as possible to avoid losing access to them.
