Here’s Why OKEx’s Halting Withdrawal Episode Won’t Haunt Bitcoin

By Ketaki Dixit
October 17, 2020 Updated October 17, 2020
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Trouble appeared to be brewing for the well-known cryptocurrency exchange OKEx after one of its founders was held by police. Following the halting of withdrawals from its platform, Bitcoin’s price tanked over 3% in a matter of a few hours. The rest of the cryptocurrency market turned red shortly thereafter.

However, this stint was short-lived as Bitcoin recovered despite nearing a crucial level of support of $11,366. This led to the altcoins, to regain traction and consolidate within the current range.

According to the crypto intelligence platform, Glassnode’s data, approximately 200,000 BTC or 1.1% of the total circulating Bitcoin supply] are currently held in OKEx wallets which makes up for roughly $2.3 billion worth of BTC stored in the exchange’s vaults. This is a massive amount and considering that OKEx happens to be a global exchange, hence, a quick sell-off was expected due to the uncertainty.

Source: Glassnode

Despite this, Bitcoin is unlikely to undergo a major price slump. Over the past couple of months, the world’s largest crypto has shown significant resilience to big news affecting the industry, be it the several high-profile incidents of fraud in the case of Kucoin or the latest Bitfinex fiasco.

One of the vital factors that have acted as a big hurdle for the growing industry is the disparate and uncertain regulation in various jurisdictions. Hence, investors could now be willing for different exchanges in different venues with a much clearer regulatory climate. And while this may not drive the cryptocurrency market to dive deep, it can, however, draw bad press for the exchange.

While Bitcoin and the rest of the cryptocurrencies flipped green again, the same cannot be said for OKEx’s native token OKB which registered a decline of over 15% in the last 24-hours. At the time of writing, OKB was trading at $5.26.

Source: OKB/USD on TradingView

The entire episode in brief:

The platform informed suspending crypto and digital assets withdrawals in the wee hours of 16th October soon after revealing that it has lost contact with one of its private key holders who was “co-operating” in a Chinese government investigation. According to a report by China state-affiliated media platform, Caixin, it was Xu Mingxing, the Founder of OKEx and one of the exchange’s private key holders, who had been taken by police at least a week ago.

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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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