As shared by popular crypto enthusiast WhalePanda, 1450 BTC has been recently added to BitMEX insurance funds and that soon most of the BTC will be locked up in this fund. The platform currently accounts for the 35 percent of total bitcoin trading volume at $4 billion.
“Soon most BTC will be locked up in the BitMEX insurance fund”
Crypto market is in deep red with Bitcoin prices falling below $3,500 and Ethereum dropping below $100 yesterday. However, today the market saw some relief as cryptos are in green with Bitcoin yet again at $4,000.
The latest development in the market is the 1,450 Bitcoins added to the insurance fund of BitMEX exchange as reported by WhalePanda, popular crypto enthusiast and Angel investor on Twitter,
— WhalePanda (@WhalePanda) November 25, 2018
According to the official website, it states,
“BitMEX uses an Insurance Fund to avoid Auto-Deleveraging in traders’ positions. The fund is used to aggress unfilled liquidation orders before they are taken over by the auto-deleveraging system.
The Insurance Fund grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price of that particular position.”
As a matter of fact, due to the reason that BitMEX has leveraged derivative unlike spot exchanges like Binance which is only for the buy and sell of actual Bitcoin, insurance funds are created.
If the price volatility in the market gets very high, many liquidations might get triggered at the same time. In case the market doesn’t have enough liquidity to absorb them, they get unfulfilled. Now for this, BitMEX has insurance fund with which the unfilled liquidations are covered.
BitMEX is a mercantile exchange that provides 100x leverage. It also accounts for the majority of the bitcoin trading volume, currently holding over 35 percent at $4 billion.
Just recently, BitMEX CEO, Arthur Hayes shared that Bitcoin bear market is here to stay at least for another year while calling out $3k price testing.
Previously, the platform has been accused of Bitcoin price manipulation and this time as well community is wary as a Twitter user comments,
“I don’t know how I feel about a market maker offering 100x leverage and having a large percent of supply. The incentive to manipulate seems high.”
Another crypto enthusiast pointed out,
“Well then I think the funds belong to them, if they choose to close today, they will take the funds with them.”
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.