BitMEX controversy and BTC volatility
By Louis Lustenberger – Crescent City Capital Market Analyst Intern
Several executives from one of the world’s leading crypto exchanges, BitMEX, were indicted on Thursday, October 1st, for suspicion of facilitating criminal activity. Although BitMEX added basic identity checks on its exchange in August, it was too little too late as the CTFC had been pushing the company to establish adequate programs for over a year.
In response to the allegations, ETH dropped 2.14% from $365, and BTC declined by more than 4% from $10,800 in only two hours. Sam Trabucco, a trader at Alameda Research, believes the sharp decline to be a foreshadowing, stating, “I’d expect increased potential for volatility as more people are able to react.”
If Bitcoin’s recent dip induces a cascade of liquidations, this could present a buying opportunity for investors. Bitcoin researcher Vijay Boyapati wrote, “The Bitcoin market has always reacted negatively to major exchange issues or government confiscations. Historically this has always presented a great buying opportunity for Bitcoin. The Department of Justice action against BitMEX will be no different.”
Sources
https://www.coindesk.com/price/ethereum
https://www.coindesk.com/bitcoin-price-bitmex-indictment-market-reaction-traders