The ever-declining price of Bitcoin (BTC) unexpectedly surged Tuesday evening, jumping from 6,450 to $6,900 almost instantly. The reason for the sudden spike up seems to be BitMEX maintenance.
BitMEX Goes Down, Bitcoin Jumps Up
An unexpected change hit the crypto market yesterday evening when a derivatives trading platform called BitMEX went down for a scheduled maintenance. BitMEX is known for trading Bitcoin, as well as other cryptocurrencies. However, the platform needed to be taken down briefly, which is when Bitcoin surged by 6%.
The platform was taken down yesterday around 9 p.m. EST. At the same moment, Bitcoin spiked to almost $6,900. Since then, the coin gradually dropped down and is valued at $6,680.33 at the time of writing. Experts say that the two events are definitely connected, with Bitwise’s CEO, Hunter Horsely, stating that the shutdown sparked an interest in Bitcoin purchase.
According to Horsely, this is only a short-term increase in trade and is a well-known strategy. Investors are buying the coin when the maintenance starts, and they are in a rush to sell that same coin as soon as the maintenance has ended.
CoinRoutes’ CEO, Dave Weisberger, also commented by saying that the traders have spotted a serious arbitrage opportunity at the moment of BitMEX shutdown. He said that Bitfinex took the lead and brought the coin to 6800+. However, GDAX was capable of catching up pretty quickly, and their clients even paid over $100 more. This was also after the other exchanges dropped back to $6700.
Bitcoin Expresses Old Behavior Once More
If you have been following Bitcoin’s progress for some time now, you might know that these sharp price changes are not unusual for Bitcoin. At least, they were not unusual back at the end of 2017, when the coin’s worth was $20,000. In the constantly bearish 2018, however, this is not that common behavior, and many believed that price variations like these have completely dried up.
Differences in prices on different exchanges are a big opportunity for those who are quick to trade since they can buy coins for a cheaper price at one exchange, and then sell them for more on another. It is not a bad way to make some extra profit, but the declining market of 2018 did not really have that many situations like this one.
Some users are reporting difficulty in logging in. We are diagnosing. We have postponed resumption of trading for 5 minutes to 01:35. We will report back shortly.
— BitMEX (@BitMEXdotcom) August 22, 2018
As for BitMEX, it finished its maintenance as expected, but there were several reports of troubles with logging into the accounts after the maintenance was done. The platform even confirmed it itself several times on their own Twitter account. However, the problems have been taken care of relatively quickly, and the trading has returned as usual.
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