- Bitcoin prices jumped by as much as 7% almost instantly at around 11am AEST.
- The move coincided directly with a scheduled shutdown of trading platform BitMEX, for maintenance purposes.
- Insiders say the shutdown led to wild trading opportunities.
- Prices have subsequently eased back slightly after almost reaching $US7,000.
Bitcoin’s value surged this morning, rocketing from around $US6,450 to almost $US6,900 almost instantly.
Prices peaked at $US6,899 before easing back slightly:
The move coincided with scheduled maintenance on BitMEX, a derivates trading platform for Bitcoin and other cryptos which allows leveraged trades.
The platform went down at 11am AEST today — which was the exact moment that Bitcoin spiked.
Industry insiders indicated the spike appeared to be directly related to the BitMEX shutdown. Hunter Horsely, the CEO of Bitwise, told Business Insider that the shutdown sparked a widespread trade to buy.
“It is a silly short term trade,” he said. “Buy when maintenance starts. Sell when it ends.”
In addition, as soon as BitMEX went down a big arbitrage opportunity opened up for traders, according to Dave Weisberger, chief executive of CoinRoutes.
“Bitfinex led it up to $US6,800 plus, but when GDAX caught up, their clients were paying over $US100 too much when the other exchanges all fell back to $US6,700,” he said. “There was a real arbitrage for a while when this all happened.”
Such price variations were common when bitcoin was running up to $US20,000 at the end of 2017, but have since dried up. In such situations, a trader can buy up coins where they are priced lower to sell on venues on which they are price higher.
Multiple accounts on Twitter indicated the move appeared to be directly related to the BitMEX shutdown.
The Twitter account for BitMEX stated multiple times that customers were having trouble logging in once maintenance was complete.
The exchange then stated that the login problems had been rectified, and resumed trading at midday AEST.