According to TokenAnalyst, volume on cryptocurrency exchanges has dropped by 40% recently. Now, exchanges are doubling down on promotions and bounties to bring more users to the fold.
Bloomberg talks about referrals
In a recent article, Bloomberg detailed the experienced of a man named Gary Cruz, who has reportedly earned $10,000 from Binance. His gains didn’t come from crypto trading but from referring people to join the world’s largest digital currency exchange. He even created a video tutorial on YouTube telling people how he managed to get free Bitcoin from Binance. While Cruz wasn’t available to comment on the story, there are many like him who are using YouTube, Twitter, Reddit, and other social media posts to drive traffic to Binance and hopefully bring new customers to the exchange.
The publication went on to compare the referral program to “multi-level marketing programs” which is commonly seen for cosmetic products and supplements. It said that people earn money by simply referring others instead of selling a real product. But crypto exchanges may need these people to help raise volumes.
Are crypto exchanges in trouble?
While the crypto business is still marching ahead, TokenAnalyst stats suggest that volumes have gone down by up to 40% in some major digital currency exchanges. This comes at a time when Bitcoin lingered on the $10,000 range only to fall and wipe out billions of dollars in market capitalization.
Binance is one of the exchanges where volumes have fallen. The company has now started bonus programs for new users which could help in cutting their trading fees. The company has promoted its programs very extensively, helping referrers get more attention from potential customers. On September 20th, the company even went on to actively promote the “earn without trade” gimmick. It wrote on Twitter,
“How can you earn over 1,000 $BTC on #Binance without making a single trade? Invite friends. Earn crypto together.”
Binance even has a Referral Rich List, which shows how much money people are making my asking others to sign up and trade on Binance. According to the list, the top referrer to their platform has earned a whopping $11.3 million in commissions alone. Bloomberg Opinion writer Aaron Brown said that it would not be shocking to learn that exchanges earn $00 to $800 million from such offerings and direct $100 to $200 million to their referral partners. Though these programs have often been criticized in the past, they are not stopping anytime soon.