Cryptsy had peaked the curiosity of the crypto world this past weekend as users noticed the addition of USD trading pairs, albeit inactive with no volume. The coins paired with USD thus far are Bitcoin, Litecoin, Dogecoin and Feathercoin:
In an e-mailed correspondence with DC Magnates, Cryptsy confirmed the upcoming addition:
“Yes, this type of trading will be available to verified accounts soon.”
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It appears USD is the only fiat added, at least for now. It appears as well that users will have to “verify” their accounts first, which will require ID and possibly other items, as found with other exchanges dealing in fiat. On the BTC-USD market page, a warning appears: “This market is for Verified Accounts Only. The User Verifications system will open within the next week.”
Cryptsy had been feeling pressure for months as users pushed for the exchange to introduce USD trading. Indeed, one update on their site a couple of months back stated that USD will be coming soon.
The latest milestone marks a long journey traveled by Cryptsy. In an altcoin panel discussion at CoinSummit, Cryptsy founder Paul Vernon described how the site didn’t even start out as an exchange and only took such a direction when people had nothing to do with their new coins.
The introduction of fiat further cements their leading position in the altcoin trading space. Cryptsy will be the only exchange offering trading in fiat (with multiple coins) and over 150 crypto pairs, including Nxt- a tough coin to add due to its different architecture.
So how will this affect the altcoin markets which Cryptsy supports? In the past, coins have shown explosive bursts in value prior to and immediately after their addition to an exchange. The coins usually came down to earth and often beyond as the reality set in that greater exchange-ability in no way entails enhancement of value.
Here, one can speculate that both effects will be in play. Users tempted by the prospect of cashing out their coins, many of them exotic, may be more likely to do so now that they can avoid the multi-legged journey of converting to bitcoins, transferring them to their wallet or another exchange and then converting to fiat. The direct channel can thus drive down prices, especially in today’s struggling market with crypto prices undergoing their worst slump in months as traders despair and join the flight to security.
By the same token, traders looking to pile in the latest, hottest coin will be able to do so directly without having to progress through the bitcoin route, although it’s hard to imagine even greater exaggerations in price movement than we’re already seeing.
Overall, the greater availability of trading permutations with fiat can perhaps provide a buffering effect on these markets, unless the divided liquidity levels are pushed below a critical level for running an efficient market.