BitMEX Investigates Sudden Bitcoin Price Drop; Ex-CEO Warns About Bitcoin ETFs Impact
Summary:
Cryptocurrency derivatives exchange BitMEX launched an internal investigation after observing an unusual activity on its Bitcoin-Tether spot market that led to a temporary price drop in Bitcoin. An unidentified entity allegedly sold over 400 Bitcoin in a brief period, which did not affect the derivative markets or prices of BitMEX. Some accounts experienced a temporary hold on withdrawals while the situation is examined. Furthermore, former BitMEX CEO Arthur Hayes warned that the success of Bitcoin exchange-traded funds could negatively impact Bitcoin mining by reducing network transactions.
BitMEX, a cryptocurrency derivatives exchange, has initiated a probe into "peculiar activity" following reports of a momentary drop in the Bitcoin (BTC) spot price on their platform. At around 1am UTC, platform users noticed an irregularity in BitMEX's BTC-Tether (USDT) spot market, which led to the temporary dip in Bitcoin prices to approximately $8,900. It is speculated that an unidentified entity offloaded over 400 Bitcoin in a short span, triggering the price drop. BitMEX verified the significant sell order on the BTC-USDT spot market and commenced an in-house investigation.
It was confirmed that the anomaly didn't impact BitMEX's derivatives markets or the prices of the XBT derivatives contracts. As per crypto researcher Syq, the unidentified entity sold batches of 10 to 50 BTC, totaling over 400 BTC within two hours. It was further discovered that BitMEX had put withdrawals on hold for some accounts. Clarifying on the account holds, BitMEX assured not all users were affected, only a select few under investigation. BitMEX also stated that their trading platform is functioning as usual and that all funds are secure.
Arthur Hayes, former BitMEX CEO, previously warned that success of spot Bitcoin exchange-traded funds (ETFs) could potentially "annihilate" Bitcoin. He reasoned that Bitcoin mining could become worthless if ETF issuers acquire all Bitcoin, reducing transactions across the Bitcoin network. This would result in no incentive for miners to carry on validating transactions. Without miners validating transactions on the network, Bitcoin could ultimately disappear, according to Hayes.
Published At
3/19/2024 11:08:53 AM
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