BitMEX Continues to Lose Steam Post-CFTC Rumor

During the same time frame, a mere $12 million worth of the cryptocurrency was deposited, implying a net $73 million outflow on the day after the report.

As noted by prominent Bitcoin and Ethereum proponent and commentator Spencer Noon, after Bloomberg published a story about the CFTC looking into BitMEX, $85 million worth of BTC fled the exchange within 24 hours.

Users of BitMEX seem to still be running scared.

Also, since then, the average value of withdrawal transactions from the exchange’s wallets has tripled, implying some form of capital flight.

To only solidify these statistics, the average daily volume for the exchange’s derivatives contracts, the most popular of which is the XBT/USD (Bitcoin-to-USD) pair, dropped significantly, as Ethereum World News covered in a previous report. Trading volume on the exchange has, in fact, dropped by 50%, implying that there is less interest in using the platform than before.

And to make matters worse, Alex Kruger, a prominent pro-crypto markets researcher and economist, has pointed out that even during peak times, he has observed 1-2 price ticks a minute for Bitcoin, implying a “low liquidity chop”.

This eerie observation has been corroborated by prominent cryptocurrency trader The Boot, who famously turned thousands into millions on the derivatives exchange. They note that over recent trading sessions, they have been observing clearly “so thin” order books. Indeed, this market has been graced with odd bouts of volatility, which have caught traders with their pants down, that were not present prior to the recent outflows.

As aforementioned, all this purportedly stems from two things: Bloomberg’s report, which stated that the CFTC is looking into if BitMEX has been knowingly allowing American users to trade on its platform; and seeming intentions from the United Kingdom’s Financial Conduct Authority to ban all cryptocurrency derivatives products, which includes BitMEX’s Bitcoin contracts.

U.S. Continues to Threaten Bitcoin & Crypto

Per Kruger, however, the decline in the liquidity of BitMEX’s market may also have something to do with comments from United States regulators and Trump’s administration.

While the economist has made it clear that a fully-fledged ban on the Bitcoin space is highly unlikely, Steven Mnuchin, the Treasury Secretary, recently warned that cryptocurrency exchanges and other service providers may soon be subject to new rules. Speaking to CNBC in a television interview, the newfound Bitcoin critic stated:

We’re going to make sure we have a unified approach and my guess is that there are going to be more regulations that come out from all these agencies.

He adds that in no way should cryptocurrencies threaten the stability of the traditional financial system.

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