What’s the Point of an Insurance Fund if It Wasn't Used on the Worst Day In BTC's History

Community Continues to Question BitMEX

  • No one to blame for the debacle but ourselves because BitMEX has “no interest in actually providing a functioning platform”
  • “Is this really what we set out to build? A speculative playground where traders and exchanges are the ones controlling our world” – Melody He, crypto hedge fund founder

One of the worst days of Bitcoin resulted in crypto derivatives exchange BitMEX recording one of its highest liquidations ever.

Once the Bitcoin price broke below $4,800, it was dominated by “cascading liquidations,” becoming its “own monster,” said Ari Paul. This widened the spread between the Bitcoin price on BitMEX, where it found the low at nearly $3,600 and spot exchange where it was around $3,700-$3,850.

As we reported, Sam Bankman-Fried, founder and CEO of competitor exchange FTX accused BitMEX of being responsible for Bitcoin’s violent sell-off. He said the price of bitcoin would have gone to zero if BitMEX hadn’t halted its platform under the pretense of “hardware issue.”

This “hardware issue” was the ”kill switch” like the circuit breaker in the traditional stock markets. “I think it was because their market was out of control. I think they made the right decision,” said pseudonymous trader Lowsrtife.

After they halted trading, the bitcoin price bounced 35% in under 25 minutes.

BitMEX then took over the manual control of the engine to make more “profit” from it and “became very reluctant to sell until the market bounced over 1000 points.”

It’s Our Own Doing

Lowstrife believes BitMEX didn’t cause the dump as such a fall would have happened anyway. But what’s clear is that “the market ceased to operate rationally below $5000.” Because of the panic that began from the broader economic turmoil in a run to cash and liquidity, BitMEX got overloaded but their liquidation engine wasn’t prepared to handle 90% of the long-side getting REKT.

For all of this, the trader said there was no one to blame but yourself because BitMEX has “no interest in actually providing a functioning platform.”

“BitMEX was undoubtedly the biggest bull (not by choice) due to the sheer amount of Long Swaps they inherited from traders who had been liquidated,” said trader with pseudonym Flood (BitMEX).

This move on BitMEX saw the liquidity in options market evaporating and 5% spread on spot markets.

Lowstrife also points out how the insurance fund of BitMEX had 35,508 XBT on March 11, 2020, and 35,210 XBT on March 14 questioning,

“What is the point of the insurance fund if, after the worst & most violent day ever in crypto, none of it was used?”

Now, the industry believes, this is not only the time for the crypto exchanges to look for circuit breakers but also as Melody He, co-founder of the crypto hedge fund, The Spartan Group said,

“After this, we should rethink the crypto financial system – is this really what we set out to build? A speculative playground where traders and exchanges are the ones controlling our world.”

Bitcoin (BTC) Live Price

1 BTC/USD =$9,652.5902 change ~ 2.08%

Coin Market Cap

$177.55 Billion

24 Hour Volume

$4.3 Billion

24 Hour VWAP

$9.58 K

24 Hour Change

$200.7796

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy
AnTy
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,438FansLike
2,795FollowersFollow
4,190FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Canada Regulates Crypto Exchanges & Companies as Money Service Providers

Canada is now legally recognizing cryptocurrency exchanges and payment processors as Money Service Businesses (MSB). The new regulation, which is the amendments to Proceeds of...

Ripple Execs, Led By CEO Brad Garlinghouse, Meet With Central Bank Of Brazil Officials in ‘Closed to the Press' Meeting

Ripple Inc.’s, Brad Garlinghouse held a ‘closed to the press’ meeting with Brazil’s Central Bank officials on May 30th to discuss “institutional matters” in...

Tezos (XTZ) Class-Action Securities Lawsuit for the $232M ICO Sees $25M Settlement Pending

A class-action lawsuit against Tezos during its 2017 ICO may end in a $25 million settlement. The lawsuit was filed against Tezos for the...

Two Top Cryptocurrencies with the Worst Serial Market Performance

After the crypto winter of 2018, digital assets started recovering last year and continued the behavior into 2020. Although still far from their all-time highs,...

Chainlink, IBM, ING, Microsoft, NASDAQ, and R3 Among First to Join InterWork Alliance to Set Tokenization Standards

Top financial and blockchain industry companies have formed the InterWork Alliance (IWA) in a bid to standardize the business and enterprise tokenization market. The alliance...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today