Over 45,000 Bitcoin has been withdrawn from BitMex since the U.S. government levied charges against the exchange
October 1 brought two devastating blows to BitMex. At first, the CFTC and DOJ charged the exchange. Soon after, its founders (including CEO Arthur Hayes) were indicted by the US government. The market reacted to the news with a sharp drop across many cryptocurrencies, especially Bitcoin. More than 45,000 Bitcoins have been withdrawn from BitMex since the US government imposed fees against the exchange and its board.
Over 45,000 Bitcoin has been withdrawn from BitMex since the U.S. government levied charges against the exchange
BitMex Bitcoin reserves | Source: Glassnode
This is not the first time in recent months that BitMex has contributed to the decline. First, this exchange started to lose trust among participants following a black Thursday outage that left users unable to trade or regain their assets. Even though users pulled out more than 100,000 Bitcoins in the six months between that and these recent fees, the withdrawals over the past two days appear to be of unprecedented scale.
Bitmex Bitcoin inflows & outflows October 1-2, 2020 | Source: Crystal Blockchain
According to Crystal Blockchain, in less than 48 hours, the exchange’s net cash flow exceeded 45,000 Bitcoin. Meanwhile, Gemini and Binance appear to be the biggest beneficiaries of these cash flows, followed by OKEx and Huobi. More than 20,000 BTC has been transferred out of BitMex and into the following four exchanges.
It is not clear whether BitMex will disappear into the abyss of time like many previously failed exchanges, or whether the company exists to trade on another day. Lance Morginn, CEO of Blockchain Intelligence Group and a former supervisory task force at the Department of Homeland Security, said that the most likely outcome is monetary penalties and promises from the regulators. BitMex’s executive director is not involved in future illegal activities.
Bitcoin could soon pop despite the news
As AZCoin News reported, Willy Woo, a prominent Bitcoin analyst, thinks the cryptocurrency is scared for all the wrong reasons in a comment on the severity of the BitMEX news. He thinks that fundamentally, the news is bullish as it may force futures exchanges, which control the market, to reduce manipulation.
Woo isn’t the only bull in the face of the BitMEX news. Mike Novogratz, CEO of Galaxy Digital and a former Goldman Sachs partner, recently stated that feeling bearish on Bitcoin due to the BitMEX news is irrational because space is larger than once exchange.
He said:
“Crypto friends, Let’s remember that you are innocent to proven guilty. It’s a cornerstone of American justice. I have no insight into the case but I wish @CryptoHayes well. I do think that $btc and crypto is far bigger than anyone exchange or person. So buy dips.”
Crypto friends, Let’s remember that you are innocent to proven guilty. It’s a cornerstone of American justice. I have no insight into the case but I wish @CryptoHayes well.
I do think that $btc and crytpo is far bigger than any one exchange or person. So buy dips.
— Mike Novogratz (@novogratz) October 1, 2020
This comes after Novogratz has been stating for months that Bitcoin is in an advantageous position on a macro scale because the cryptocurrency has an underlying bid due to stimulus. He thinks that the Federal Reserve and the U.S. government are driving liquidity into assets like BTC and gold.
Many agreed with the sentiment Novogratz shared, including Bill Barhydt of Abra and hundreds of users on Twitter, who shared and liked the comment he shared.
Read more:
- BitMEX Traders Withdrew Over 37,000 Bitcoin ($400 Million) In Less Than 24 Hours After CFTC Charges, Binance And Gemini Are Winners
- On-Chain Data Pointing To Underlying Strength, With Bitcoin Price Seeing Massive Inflows Of New Capital From New Investors