Did the BitMEX Scheduled Maintenance Shutdown Cause Yesterday’s Bitcoin Price Spike?
Bitcoin witnessed an unexpected explosion in its value yesterday, rallying over $350 USD in a single hour. The sudden bitcoin price spike occurred at the same time as the scheduled maintenance of leveraged trading platform BitMEX. Some market insiders have directly linked the two. Are they right?
Also see: All Eyes on the SEC As Bitcoin ETF Decision Season Looms
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Bitcoin Price Surges Five Percent in One Hour
For the past two weeks, bitcoin has been range-bound between $6,000 and $6,500. Yesterday, the market-leading cryptocurrency experienced a price spike of over five percent in an hour, jumping from $6,463 to $6,816, according to Coinmarketcap. Following the sudden jump, the bitcoin price settled back down to $6,700.
Coinmarketcap does not include BitMEX prices when calculating the average prices for cryptocurrencies. The Coinmarketcap website states:
“The BTC/USD market on BitMEX is a derivatives market NOT actually spot trading Bitcoin. As a result, it has been excluded from the price and volume averages of Bitcoin.”
Market Insiders Link Bitcoin Price Spike to BitMEX Pause
Industry insiders believe that BitMEX’s brief halt for maintenance was a major factor in bitcoin’s price upswing. Bitwise CEO told Business Insider:
“It is a silly short term trade. Buy when maintenance starts. Sell when it ends.”
CoinRoutes CEO Dave Weisberger suggested that BitMEX’s scheduled maintenance shutdown offered traders the right set of circumstances for arbitrage.
“Bitfinex led it up to $US 6,800 plus, but when GDAX caught up, their clients were paying over $US 100 too much when the other exchanges all fell back to $US 6,700. There was a real arbitrage for a while when this all happened.”
Bitcoin evangelist Alistair Milne predicted the price surge:
Massive Bitcoin short squeeze to coincide with BitMex downtime tomorrow?
Stranger things have happened …
— Alistair Milne (@alistairmilne) August 21, 2018
It is incidents such as these that cause concern among American securities regulators when considering bitcoin ETF applications.
The unexpected rise in the bitcoin price also positively reflected on the overall market cap, adding $12 billion to bring it up to $222.8 billion. At press time, the crypto market cap stands at $216 billion.
Along with bitcoin, all top 20 altcoins saw marginal gains except Tether and Tezos. EOS and litecoin were the top gainers among the top 10, rising by over eight and five percent respectively. However, VeChain saw the biggest leap among the top 20, at one point increasing by over 15 percent.
Does yesterday’s bitcoin price spike indicate manipulation? Share your views in the comments section below.
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