Exchanges are as important in the digital currency scene as cryptocurrencies themselves. As Blockchain is for cryptocurrencies, so is an exchange to crypto users, or do we say it’s the backbone of cryptocurrencies. Exchanges have influenced market performance in recent times, until today, and how cryptocurrency users respond to the market.
The recent BitMEX and OKEx dispute is a perfect example of the impact of exchanges on the cryptocurrency market; Bitcoin fell by almost 4% when OKEx, one of the largest cryptocurrency exchanges in Malta, declared that cryptocurrency withdrawals were suspended until further notice, while BitMEX, on the other hand, caused open interest to drop by 16%.
Nevertheless, one of the well-known analysts of cryptography claims that price fluctuations no longer bamboozle the cryptocurrency community as they used to do in previous years in the face of these price controversies.
“Qiao Wang, a self-proclaimed” consultant “startup and popular cryptocurrency analyst, best known for championing DeFi and other related Ethereum projects, recently took to Twitter and revealed that the definition within the crypto-industry of cryptocurrency exchanges that trigger fear, confusion, and doubt is” dead.
Wang observed that Bitcoin increased by up to 5% in 3 weeks to back up his take, at which time Kucoin, BitMEX, and Okex dealt with big setbacks from both internal and external variables.
While Kucoin ‘s CEO has now confirmed that the culprits behind the $200 million + hack exchanges were fished out and funds were recovered, while the protection of consumer funds was being challenged, the industry was left in a state of confusion.
Following that incident, Arcane research data revealed that open interest in BitMEX Bitcoin perp reached a new low of 45,112 BTCs; a reflection of the 16% decline that followed charges against BitMEX and its executives by the Commodity Futures Trading Commission ( CFTC) for allegedly operating an unregistered trading platform for cryptocurrencies.
Leading on from that, the withdrawal suspension announcement from OKEx, which up to now has no call-off date, took the industry by storm, and all of these were not enough to pull Bitcoin back from making a fast comeback and climbing back to $11,500, which is reflected in the 5% gains over that time.
It is also a fact that, no matter how little, exchange setbacks can influence the cryptocurrency industry in different ways. The market movement will undoubtedly report some sort of decline, but as the industry continues its inevitable evolution, there is no denying that reaction to market dynamics will continue to evolve, exchanges are not removed from this path as with many other important sections of the fintech industry.