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BitMEX has long been a source of polarization within the crypto industry. Despite many traders blaming it for the so-called “scam wicks” and immense volatility within the crypto markets, it remained the largest and most widely used Bitcoin trading platform.
Its dominance over this fragment of the market has been waning over the past few months, as a cascade of liquidations seen on the platform in March is what caused Bitcoin to nosedive from $8,000 to $3,800 over the span of just a few hours.
Users are now fleeing the platform in droves, likely due to fears regarding U.S. authorities from seizing the website and locking up the funds on the platform.
As a result of this, BitMEX saw the largest single-hour withdraw following the CFTC’s announcement, with the vast majority of this crypto being moved to cold storage wallets.
There’s a high likelihood that this trend will persist in the near-term and will likely be perpetuated by those living in the US who are using VPNs to subvert the IP ban.
BitMEX Continues Ceding Market Dominance Following CFTC Charges
As NewsBTC reported yesterday, the CFTC recently announced that they were placing charges against the three co-founders of BitMEX, even arresting one that was residing within the U.S.
The other co-founders have yet to be apprehended but are being accused of flouting a variety of different regulations via the operation of the cryptocurrency exchange.
The charges are quite serious and do carry prison time – assuming the defendants are found guilty.
This has sent fear down the spines of crypto investors around the globe, as it signals that the U.S. may be gearing up for a major regulatory push that cracks down on derivatives platforms and other trading venues.
BitMEX Sees Largest Single Bitcoin Withdraw Batch Ever
Following news regarding the CFTC’s announcement, BitMEX saw its largest single-batch withdraw of Bitcoin ever.
Glassnode, an on-chain analytics platform, spoke about this in a recent tweet, explaining that this was the “largest hourly BTC outflow from BitMEX” that has ever been seen.
Philip Gradwell, the Chief Economist at Chainalysis, offered some insight into the magnitude of the withdraws:
“24,577 bitcoin has now been withdrawn from BitMEX, 65% to exchanges with the remainder to unhosted wallets. Total inflows to exchanges averaged 65k bitcoin this last week, so BitMEX withdrawals are adding 25% more liquidity already and more will come with the 08:00 UTC withdrawal.”
It’s highly likely that users will continue withdrawing funds from exchanges at a rapid pace in the coming few days and weeks.
Featured image from Unsplash.
