Bitcoin is down 45% this year - but that's not what's worrying cryptocurrency exchanges
- Bitcoin is experiencing a rough start to 2018, but that's not the biggest concern for a developer at the world's longest-standing crypto exchange.
- Miha Grcar, head of business development at Bitstamp, told Business Insider a talent shortage is hanging over the industry.
The cryptocurrency markets are awash in a sea of red, but that's not a concern for the longest existing cryptocurrency exchange.
Bitcoin has had a terrible start to the year. The digital currency, which gripped the world's attention when it soared close to $20,000 a coin in December, is down 45% since the beginning of 2018. As for trading action, volumes across the market for digital currency have decreased since crypto-mania peaked at the end of last year.
But this is a much needed break for cryptocurrency exchanges, which needed to shepherd a niche market into the mainstream.
"We are finally catching our breath," Miha Grcar, head of business development at Bitstamp, a Luxembourg-based exchange founded in 2011, told Business Insider during a phone interview.
Twenty-four hour trading volumes, according to cryptocurrency data site CoinMarketCap, have been in the $20 to $30 billion range since the beginning of February - down from an all-time high above $70 billion set January 4. The record-breaking volumes of December and early January put intense pressure on the weak infrastructure of cryptocurrency exchanges, leading to hours- and days-long outages. Many even had to close the door to new customers, as Business Insider first reported.
"We saw an influx of customers," Grcar said. "The challenges we faced were also faced by our competitors."
Kraken, a US-based exchange, was adding 50,000 new users a day at the end of December, a person familiar with the company's operations told Business Insider. In January, the company witnessed a two-day outage.
In order to handle the demand in the market, cryptocurrency exchanges extensively built out their infrastructures.
Such upgrades require talent that is in short supply, according to Grcar. He told Business Insider that a talent shortage - not a bitcoin bear market - is the big concern hanging over the head of cryptocurrency companies.
"Globally the pool of talent, people with experience in blockchain and distributed ledger technology, is somewhat limited," Grcar said. "This is a big challenge."
It's not just cryptocurrency exchanges going after such talent. Companies like Bitstamp and Kraken have to go head-to-head with some of the largest financial firms in the world, including the likes of JPMorgan and Citigroup. Both financial juggernauts have posted jobs advertisements seeking experience with blockchain, the technology behind cryptocurrencies like bitcoin.
As noted by Bloomberg, the number of blockchain or cryptocurrency job postings increased fourfold in 2017.
"JPMorgan has a team, but it is not defined how companies can utilize and monetize it yet," a headhunter, who asked not to be identified, told Business Insider.
Still, he noted there are fewer folks with expertise in the space so they are harder to find. "Everyone is facing this these days," Grcar said.
As for the bitcoin bear market, Grcar said that the market is experiencing a brief pause. "We see more exciting times on the horizon."