Why Gemini Is Ending Support for These Cryptocurrencies

There are a variety of factors that likely weigh into Gemini’s discovery or decision to end . 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.