Bitcoin Spikes 7 Percent as BitMEX Undergoes “Scheduled Maintenance”
Bitcoin market capitalization jumped from $6,450 to $6,900 in mere moments at 9 PM EST. This coincided directly with a scheduled shutdown of the trading platform BitMEX.
Down for Maintenance or Manipulation?
The twitter account for BitMEX stated several times that customers were having trouble accessing their services until the site was fixed. Trading resumed after the maintenance completed at 9 PM.
During the small window of time that the platform was down traders swooped in to make a quick buck showing once again that cryptomarkets are not immune to the short sell.
The price of Bitcoin shot up to around $6,900 which prompted many to make short-term sales. The idea being that customers could purchase when the maintenance began and sold when it ended.
Though this wasn’t a massive windfall for short-term traders, it is a tactic regularly employed in volatile markets. Capitalizing on price fluctuations like this were common at the end of 2017 when the price was running at $20,000.
Short sellers exist in both traditional financial markets as well as the crypto space. Investors can bet against the price of an asset or security with the hope that capitalization will then drop. When the price eventually falls, investors can then purchase the asset at a lower price while turning a marginal profit.
Price swings like this can be a double-edged sword. While money can be made due to market changes, potential investors have to catch the wave at the right time or risk getting rekt. This is not unusual, but the crypto market is maturing with savvy customers who are beginning to realize that attempting to make a quick crypto buck is a losing battle.
More and more investors are getting into crypto for the long term, but that doesn’t make them immune to taking an opportunity when it presents itself.
BitMEX is a derivatives trading platform for cryptocurrencies. Even though this is only one platform, it is susceptible to short trades like this event. If and when the overall trading volume of cryptocurrencies rises so will schemes for making short-term money in a turbulent market.