Bitcoin’s price has been up dramatically because the very day in style exchange OKEx introduced the suspension of all crypto withdrawal service on its platform. Nevertheless, whereas some tie the 2 collectively, many market observers don’t see a cause to affiliate the newest price rally with OKEx’s points.
Whereas the price of bitcoin gained considerably because the market sell-off in March, the newest bullish run started simply as OKEx mentioned it suspended all crypto withdrawals as a result of certainly one of its key holders has “been out of touch.”
Nevertheless, the suspension of withdrawals on OKEx had little influence on bitcoin’s price over the previous month, mentioned Ki Younger Ju, chief government officer of CryptoQuant.
The Malta-based crypto exchange nonetheless stays the No. 1 place for bitcoin futures open curiosity, presently worth $1.22 billion, based on knowledge supply Skew.
OKEx mentioned Thursday it’s going to resume withdrawal service as quickly as this week, after founder Mingxing “Star” Xu was mentioned to have been launched from police custody in China. Jay Hao, chief government officer of OKEx, instructed Fintech Zoom its excessive open curiosity is a optimistic indicator for his firm.
“These are encouraging signs that confidence in the exchange remains high and I believe that even if some users decide to withdraw their funds [as soon as withdrawals are open], which is their total and absolute right, they will soon come back to OKEx,” Hao mentioned by way of a spokesperson on Telegram.
Decreased Chinese language miners’ influence on costs
Bitcoin’s quantity from miners to OKEx has additionally dropped to virtually zero because the information got here out, as knowledge from Glassnode present.
The muted bitcoin switch quantity from miners to OKEx, whose customers are largely Chinese language, is in keeping with the argument that the price surge is partly resulting from drying up in provide. Miners in China are struggling to show their bitcoin into cash due to a authorities crackdown on Chinese language exchanges.
Darius Sit, founding father of Singapore-based buying and selling agency QCP, connects the state of affairs for miners in China with the market, telling Fintech Zoom that as a substitute of going to different platforms, miners may have been holding on to their bitcoins as costs proceed to climb, inflicting a tightened bitcoin provide.
But, others have largely disagreed with such contentions, saying the provision of bitcoin affected by OKEx’s withdrawal suspension is comparatively small.
“As a class, miners aren’t that large a group of sellers,” Ryan Watkins, bitcoin analyst at Messari, instructed Fintech Zoom in a Telegram message. “[They are] definitely not enough to drive the price up as high as it is.”
As an alternative, Watkins identified the latest bitcoin rally is usually pushed by the demand facet, as institutional traders in North America have been shopping for bitcoin in massive quantities.
The “perfect” timing of OKEx’s suspension and the price rally might be purely coincidental, Watkins added.
Information from Chainalysis additionally point out that after mining swimming pools stopped sending bitcoin to OKEx, their newly minted cryptocurrency as a substitute flowed to Binance and Huobi, each of that are additionally broadly utilized in China.
Binance, Huobi and OKEx in whole obtained 46% of bitcoin despatched to exchanges from mining swimming pools prior to now 12 months, based on a Nov. 12 report from Chainalysis.
Colin Wu, a journalist based mostly in China who first reported the Chinese language miners’ promoting downside in his weblog, instructed Fintech Zoom in a WeChat message that Western media retailers have largely “exaggerated” what he wrote, saying the difficulties Chinese language miners have had promoting bitcoin ought to have had a minor influence on the latest price rally.
“The misunderstanding is that Chinese miners stopped selling coins and caused bitcoin to rise, which is illogical,” Wu wrote in a tweet thread. “They did not stop selling coins. … It was just a little troublesome and the number of miners in China has been decreasing. Miners are moving to the United States and Kazakhstan.”