Recently, the crypto market jumped by $12 billion in just an hour. In just an hour, crypto market capitalization reached as high as $222.8 billion. In the past days, Bitcoin was trading around $6,400 to $6,500 even slipping down below $6,000 at one point. However, by the time BitMEX paused its service for its maintenance, Bitcoin was able to jump to almost $6,900.
BitMEX is a derivative trading platform for cryptocurrencies. And once BitMEX went offline, Bitcoin spiked up slightly.
According to the website, BitMEX described itself as a Peer-to-Peer Trading Platform offering leveraged contracts bought and sold using Bitcoin. According to the website, the daily trade volume is at $3.76 billion. If you will compare the biggest crypto exchange today, the daily trade volume of Binance is only at around $1.12 billion.
According to Hunter Horsley who is the CEO of Bitwise, the shutdown was a signal for many investors to buy. He said that “it’s a silly short term trade”. He also added that “Buy when maintenance starts. Sell when ends”. Dave Weisberger believes that a big arbitrage opportunity opened up as BitMEX was under maintenance.
Short-Term Growth for Other Cryptos
Only one digital currency from the top ten cryptocurrencies didn’t experience a major growth during this time. In fact, the rest of the other cryptocurrencies gained from 4 to 9 percent. EOS had a good run with an increase of up to 8.7%. As for the top 20 cryptocurrencies, VeChain was the one that had a significant increase with a whopping 18.67%.
Is It Still Every Going Back Up As Good as 2017?
Bitcoin had a rough 2018. Though you have the likes of Tom Lee is still confident with Bitcoin. He thinks that Bitcoin is going to reach $22,000 this year, there are those who really think that it is far from happening at this point. In June, Bitcoin dipped all the way to $5,755. However, by July, it had a solid month hovering around $8,200. There was also a recovery in terms of the level of activity on Bitcoin’s network by July.
However, by August, Bitcoin slumped below $6,500 and there was even a point when it slipped below $6,000. According to Forbes.com’s interactive Bitcoin Price Estimator, Bitcoin price is going to settle around $9,500. It is down from the earlier estimate of Bitcoin hitting $10,500.
What Drove Price Fluctuations?
2017 was quite a fun ride for those who invested in the early part of the year. However, as 2018 entered, regulatory changes happened that caused the price of cryptocurrencies to drop. Financial regulators reacted differently towards the crypto market. Some regulators banned crypto-activities while others were more open towards the niche.
The question now is if Bitcoin could sustain the gains that it received for a couple of days? Of course, this remains to be seen where Bitcoin price is heading. Is this really just a short burst for the market?
Bitcoin has been down since the US Securities and Exchange Commission decided to decline the Bitcoin ETF application of Cameron and Tyler Winklevoss for the second time around. And also, the agency also postponed its decision on other crypto related ETFs.