Crypto Delisting: Definition, History and Examples

Bittime - The terms delisting popping up a lot lately. However, not many truly understand what it means and its impact on traded digital assets. Learn the meaning, history and examples of delisting in crypto assets that you need to know in this article, come on!

Crypto delisting refers to the removal of a cryptocurrency from the trading list on an exchange. This is a process that affects the liquidity and value of a cryptocurrency and creates many concerns for investors who own these assets. 

This article will discuss in more depth the meaning of delisting, its history, as well as several examples that occur in the world of cryptocurrency.

What is Delisting?

Simply, delisting is the process of removing a cryptocurrency from a trading platform. 

When an exchange decides to no longer provide a particular cryptocurrency for trading, that cryptocurrency will be removed from the list of available assets. 

The reasons behind delisting can vary, ranging from a decrease in trading volume, security concerns, to regulatory issues.

The delisting process can have quite a big impact on the holders of these assets. One of the most visible impacts is a decrease in the price of the delisted cryptocurrency, because by delisting, its liquidity will be reduced. 

Delisted assets will be more difficult to buy or sell, which in turn may reduce investor interest. Apart from that, delisting could indicate a problem with the cryptocurrency, both in terms of security, legality, or the credibility of the project.

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Delisting History

Despite the term delisting better known in the stock market, this concept has been around since the late 18th century. Basically, stock exchanges have delisted certain securities or shares that are deemed not to meet trading requirements or are unattractive to investors. 

Likewise, in the world of cryptocurrency, delisting is part of market dynamics where exchanges try to keep traded assets relevant and safe.

Delisting first emerged in the crypto context when exchanges began to introduce stricter rules and policies regarding which assets could be traded. 

As regulations regarding digital currencies develop in various countries, crypto exchanges are starting to delist to maintain compliance with the law and also increase their credibility. 

With increasing attention to security and transparency in the crypto world, many exchanges are choosing to delist cryptocurrencies that no longer meet certain standards.

Crypto Asset Delisting Example

Several large exchanges, such as Binance and Coinbase, have delisted a number of cryptocurrencies. The following are some well-known examples:

1. Delisting due to Low Trading Volume

Cryptocurrencies that have low trading volumes will struggle to obtain the liquidity needed to function effectively. 

For example, an exchange might decide to delist a coin with low trading volume. This aims to focus more on the more popular and widely traded coins. 

This often happens with coins that don't have a large community or don't get attention from their developers.

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2. Delisting due to Security Issues

Some cryptocurrencies have been forced to be removed from exchanges due to security concerns. For example, if there are major gaps in the blockchain security system or if the asset is involved in a cyber attack, then the exchange may delist it to protect its users from potential greater losses.

3. Delisting due to Regulatory Issues

Regulatory issues are also the main reason why a cryptocurrency can be removed from exchanges. 

For example, if a particular cryptocurrency is found to violate anti-money laundering (AML) laws or securities regulations, exchanges will be forced to delist them to comply with applicable laws. 

Countries with strict regulations, such as the United States and Europe, have policies that are more likely to write off assets that do not comply with regulations.

4. Delisting due to failure in the project

There are times when a cryptocurrency experiences a decline due to project failure or because the developer stops further development. 

A clear example is when the project underlying the cryptocurrency is no longer active, or when its developers do not update the code or continue with their roadmap. 

The crypto exchange then chose to remove the cryptocurrency from its platform.

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Conclusion

Crypto delisting is a process that occurs when a cryptocurrency is removed from a trading exchange. This can be caused by various reasons, such as low trading volume, security issues, regulatory issues, or even project failure. 

For investors, delisting can cause reduced liquidity and decreased asset value. Therefore, it is important to always monitor market conditions and applicable regulations so as not to get caught in problems caused by delisting.

FAQ

What is crypto delisting?

Crypto delisting is the process of removing a cryptocurrency from the trading list on an exchange, which can occur for various reasons, such as trading volume or regulatory issues.

What impact will delisting have on investors?

Delisting can reduce the liquidity of cryptocurrencies, make it difficult for investors to buy or sell those assets, and can reduce the price of cryptocurrencies in the market.

Does delisting only happen to bad cryptocurrencies?

Not always. Some cryptocurrencies may be delisted for technical reasons, such as low trading volume or changes in regulations, rather than because of the quality or potential of the asset.

How to Buy Crypto on Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference 

Coinscan, What is Delisting?, accessed January 13, 2025.

Investopedia, Delisting: What It Means and How It Works for Stock Shares, accessed January 13, 2025.

Author: Y