The closure of crypto derivatives exchange BitMEX is prompting fresh questions about whether the industry is entering a new phase of consolidation, as analysts point to market-share concentration and rising regulatory costs squeezing smaller platforms.

While BitMEX helped pioneer perpetual swaps that became a cornerstone of digital asset derivatives trading, its daily Bitcoin futures volume began declining around May 2021 and never recovered to its 2020 daily peak of between $1 billion and $5 billion, according to data from CryptoQuant.

Restructuring adviser Roshan Dharia told Cointelegraph the exchange’s demise reflects structural pressures facing mid-sized centralized exchanges, where liquidity has increasingly concentrated among the…