The U.S. Commodity Futures Trading Commission (CFTC) is investigating the famous x100 leverage trading platform, BitMEX. The investigation is to see if they are breaking the rules by allowing U.S citizens to trade on their platform.
BitMEX is being investigated also for market manipulation. The derivatives platform offers high leverage that exposes users to high risk and it is thought that Bitmex trades against their users.
Suddenly the big orders on their order book disappeared after the CFTC investigation and the order book actually looks very thin which is unusual for BitMEX.
Looking at the movement of BTC funds in and out of exchanges in the last 24 hours, BitMEX withdrawals are $85 million or nearly 8 times bigger than deposits that are only #12 million.
🚨 24H BTC exchange on-chain flows:#binance: $58M in | $54M out#bitstamp: $52M in | $50M out#bittrex: $4M in | $5M out#poloniex: $6M in | $4M out#bitmex: $12M in | $85M out
See more at https://t.co/6AFFM1D63p
— TokenAnalyst (@thetokenanalyst) July 20, 2019
But what is BitMEX and what may do tho crypto an eventual shutdown?
BitMEX crypto derivatives exchange is mostly an instrument to short Bitcoin or Ethereum. Ethereum was listed on BitMEX on July 2018 and if you look at the charts you can see the effect this had on ETH price. ETH price went from $400 to $200 in one month after the BItmex listing.
Futures have always been an instrument to suppress prices creating liquidity from thin air. In December 2017 Bitcoin entered in a bear market after the opening of CME and CBOE Futures and the price retraced 85 percent from the ATH in December 2018.
Exchanges like BitMEX are designed to take the money from retail users and enrich the platform and the good traders.
An eventual shut down of BitMEX would have a positive effect on Bitcoin and crypto in general.
The big increase of withdrawal on BitMEX might be a good sign that more funds will go on spot exchanges. With these high-risk players going to spot exchanges the most probable thing is that funds will be invested on Altcoins to make more bitcoins at the end.
What are your thoughts about BitMEX investigation, an eventual shutdown and the effect this could have in crypto?
Feel free to post in the comments below.
