BitMEX had a planned maintenance outage today, 22 August, and the bulls took the opportunity to come out to play.
On Bitfinex the bitcoin price jumped nearly 7% to $6,900 when the outage began, leading to claims of market manipulation. The finger shouldn’t be pointed at BitMEX however, so much as the leveraged short sellers it attracts. With the favourite venue of the shorters closed for two hours the bulls seem to have taken the opportunity to bid prices higher. Bitcoin is currently trading at $6,668 and dominance has moved up to 53.1%, according to coinmarketcap.
Whatever the exact truth of the matter two things are apparent: BitMEX has an outsized influence on prices and the SEC will continue to kill all ETF proposals that come before it for as long as blatant market manipulation is the order of the day in crypto markets. BitMEX allows its clients to trade on margin of up to 100x. The Hong Kong-based company was co-founded by Arthur Hayes and by some estimates accounts for 40% of USD trading.
The ProShares Short bitcoin ETF is up for approval at the SEC on Thursday but chances of success must be negligible, especially so after today’s events. By way of encouragement for the optimists, the ProShares vehicle is a synthetic ETF, which means it does not hold the underlying asset directly. Instead, the ETF will buy bitcoin futures contracts to gain exposure. The CME contract’s Bitcoin Reference Rate is set with data from Bitstamp, GDAX, itBit and Kraken exchanges, with less robust ones excluded.
Also, in the event of the rejection of the ProShares effort, the VanEck Solid X Bitcoin ETF should be treated as a different beast because it will hold physical bitcoin. That however means the regulator will want to closely assess the custody arrangements of the VanEck fund.
Other news, sees the boss of Chinese mining giant Bitmain Jihan Wu give ICOs “one or two years” before the bubble pops. Bitmain is currently conducting an IPO and has been valued at $19 billion on the basis of first quarter profits of $1.1 billion.
Elsewhere, the central bank of Thailand is developing a central bank digital currency (CBDC) with proof-of-concept trials slated to end in March next year. Most of the world’s main central banks have been developing testing CBDCs.
In the US, Steve Wozniak, the co-founder of Apple who has been blowing hot and cold on crypto despite his belief in the strength underlying technology, has taken on a role with blockchain startup Equi Capital.
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane