Nick Chong · 1 week ago · 2 min read · Insights via Grayscale Investments
This Exchange News was brought to you by OKCoin, our preferred Exchange Partner.
Leading Bitcoin exchange BitMEX has recorded the largest volume candle in the history of cryptocurrency, with over $2 billion traded within four hours on July 17, 2018.
The event was first marked in a tweet by Broccolex, a self-declared blockchain analyst:
⚠️@BitMEXdotcom painted the largest 4hr volume candle ever today ⚠️More than 2 billion dollars (2,000,000,000) was traded in a 4 hour time timeframe
— Broccolex (@Broccolex) July 17, 2018
Occurring between 16:00 and 20:00 GMT, BitMEX’s mammoth spike accounted for more than 80% of all of the day’s Bitcoin trading — with $5.84 billion BTC traded globally. The furious bull run managed to push Bitcoin’s price up more than 8% in price as the leading cryptocurrency broke through the $7000-mark.
Some would question the legitimacy of this volume, however. Responding to Broccolex’s tweet, one user commented:
$HKN please stop these exchanges creating false volume
— 🍜asiansmallcoins🍜 (@asiansmallcoins) July 17, 2018
As a holy grail of sorts, trade volume serves as a quantifiable measure of an exchange’s usership and monetary success.
When it comes to fee-charging exchanges, the incentive to manipulate volumes is evident. Huobi’s 0.2% trading fee is double that of Binance’s, yet its daily revenue stands nearly 30% lower than Malta-based Binance — the world’s largest (fee-charging) exchange by daily volume.
And manipulate, they do, according to trader and investor Sylvain Ribes. In a study published March 2018, Ribes asserted that at the time more than $3 billion of cryptocurrency volume was manipulated — including that of OKEx — currently the second-largest (fee-charging) exchange by volume.
— Sylvain Ribes (@ArtPlaie) March 10, 2018
Accusing a fee-less market such as BitMEX of foul play is a little more complex, however. BitMEX — which sees more than double the daily trade volume of Binance — is by technicality the world’s largest cryptocurrency market, yet remarkably, it does not charge fees.
In theory, fee-less exchanges may be particularly vulnerable to price manipulation. As there is no cost to place an order — whether organic or inorganic — trading bots and individuals may interfere with an asset’s slippage, thereby skewing price in their favor.
Where Ribes’ report implicates OKEx, Huobi, HitBTC, and even the coveted Binance, BitMEX is notably absent. As the wary eye of regulation is cast over the cryptocurrency market, however, surely no exchange will be exempt from unprecedented scrutiny.