BitMEX, the Seychelles based bitcoin trading platform saw the dramatic drop in its holdings of cold wallet storage in the month of July. The slide was caused by the news that the Commodity Futures Trading Commission will scrutinize the Exchange. After the declined balance in December, BitMEX experienced a massive inflow of 100,000 BTC in recent months.
Some data around BitMEX which had a more challenging H2 last year with the CFTC probe in July, the email leak in November & a significant increase in competition on the perpetual swap product it created.
Observation #1: Customers continue to trust BitMEX with their funds! pic.twitter.com/vM28ZWuvzi
— skew (@skewdotcom) February 5, 2020
Speculations Related to Holdings of BitMEX
Subsequently, after the massive transfer of the BTC to its cold wallet, many investors have speculated about market manipulation. Some analysts explained that many crypto “whales” are known for moving a significant number of coins to a particular crypto address just before selling them to impact market prices.
On the contrary, crypto enthusiasts are predicting that BitMEX is aiming for the security of coins by transferring them to cold wallet. As the cold wallet involves the offline storing of the bitcoins, it may aid in fraud prevention through cyber attacks. Another reason for the enormous rise in holdings can be attributed to increasing the liquidity on the Exchange. Thus, the causes for the raised holdings are mere speculations at this point.
Unbeatable Crypto-Derivative Platform
2019 proved as the dreadful year for the crypto-derivatives Exchange BitMEX. The series of events started with the investigation of Commodity Futures Trading Commission (CFTC). The probe was to find if the Exchange deliberately lured the citizens of America to trade on the unregulated platform. BitMEX was also accused of “systematic illegal activity” last year.
Regardless of chaos experienced by BitMEX, the investors kept their trust in the Exchange, and the holding scaled up throughout the year. The analytics platform Skew examined that insurance fund of BitMEX contained 34,000 BTC and stated it as “the most capitalized crypto native clearinghouse of the crypto industry.” Also, the total open interest across contracts on the Exchange noticed an upward trend to reach $1.5 billion. Not only the holdings of cold wallet hiked up, but BitMEX also observed positive inflows.