Everyone knows the BitMEX situation after CTO Samuel Reed was arrested on October 1. The implications of this are enormous, however, the traders’ perspectives give us a different perspective.
OI on BitMEX decreased before the exchange was ‘touched’ by authorities. However, for now, the OI has decreased enough for its competitors to take its place. As of today, ByBit has surpassed BitMEX in OI.
Now, BitMEX has slipped to 3rd place with Binance still holding the top spot.
This drop comes even though BitMEX broke the “traditional once-a-day process of withdrawals” and did 6 times in 2 days to reassure traders that the funds were ‘SAFU’.
If the above two points did not trigger a exodus of traders, then perhaps, it could. One of the top traders on BitMEX “Mercury-Wood-Sprite” may have left the platform. This trader last updated on October 2, one day after the BitMEX CTO was arrested.
Will the BitMEX case combined with the KuCoin hack affect Bitcoin price?
While BitMEX has faced massive US legal action, KuCoin has suffered a substantial hack, all within a period of a few days – but why these events have not affected Bitcoin price in a more negative way?
Aleks Svetski, CEO of Bitcoin investment app Amber, said it involves a number of factors, including large players buying Bitcoin.
“The price of Bitcoin is a function of global demand for a tight supply, does not change and decreases according to schedule,” said Aleks Svetski, referring to halving the money supply of the asset and mining .
“As more people, especially large-scale institutions seek to buy back some coins, it not only creates the floor price, but also continues to increase the upward pressure, and ultimately, new players. These are all holding Bitcoin outside of exchanges, and therefore it is not available for sale on the market. ”
Over the course of 2020, several major players publicly announced massive Bitcoin purchases, including MicroStrategy, Paul Tudor Jones, Square and most recently Stone Ridge.
Contrary to the bullish price action, exchange KuCoin has been hit by a hack totaling more than $ 100 million. A few days later, the authorities of the US government took legal action against the BitMEX exchange, arresting one of its leaders.
However, neither of these events has caused Bitcoin to fall into a downtrend. Bitcoin did not drop significantly according to KuCoin news and only dropped a few hundred dollars when BitMEX news came out – a relatively small response to an important news event. Conversely, after the price action has been sideways for a number of days, the asset starts its journey up from the consolidation level.
“This is setting up for an unusual race and hacking the exchange, delaying stimulus or state policy won’t be able to hold it back.”