The recent charges filed against the popular digital currency derivatives trading platform, BitMEX, has shot up the number of Bitcoins moving off the exchange. However, the massive withdrawals haven’t contributed a significant impact on the exchange’s liquidity when compared by the bid/offer spread. This somewhat suggests that most traders on the platform are not alarmed by the recent development.
About $337 million in Bitcoin has been moved from BitMEX
As reported on Friday, data from Glassnode revealed that at least 32,200 Bitcoins had been withdrawn from BitMEX since the start of the CFTC development. Following the price of cryptocurrency ($10,489) at the time of writing, the number of Bitcoin moved from the exchange equals $337,745,800. Also, this represents about 19 percent of the whole funds held by the exchange, according to the on-chain analytics platform.
Many people speculate that a significant number of Bitcoin will still be moved from BitMEX, as the withdrawal time on exchange shades the actual amount of cryptocurrency withdrawal orders placed by traders. This is so because the derivatives exchange reportedly holds all the cryptocurrency deposits in an offline/cold wallet. So, cryptocurrency traders on the platform have to wait for a certain period before their withdrawal orders are completed.
The offline-wallet method used by the exchange has helped prevent hacks, as people speculate.
Where are the Bitcoins moving to?
Other cryptocurrency exchanges are seeing relatively increased liquidity amid the outflow of Bitcoin from BitMEX, explained Philip Gradwell from Chainalysis. The CFTC charges against the derivatives exchange spurred an additional 25 percent increase in inflow for other exchanges. Precisely, a significant percentage of the outflow (65 percent) went to other exchanges, while 35 percent went to unhosted wallets.
Despite the massive outflows, BitMEX liquidity in terms of the bid-offer spreads didn’t have a significant impact, neither did the other exchanges’ liquidity skyrocket. This means the traders of the derivatives exchange are not seriously alarmed as many speculations paint it to be. At least, until the subsequent withdrawals are fulfilled.