Bitcoin outflows from prominent crypto derivatives exchange BitMEX are already up in the wake of charges from U.S. agencies announced Thursday.

  • The U.S. Commodity Futures Trading Commission (CFTC) and the acting U.S. Attorney for the Southern District of New York both announced they are charging BitMEX with facilitating unregistered trading and other illegal transactions.
  • Since then, more than 32,200 BTC (worth around $337 million) has been moved from BitMEX – 19% of the exchange's total funds, according to data source Glassnode.
  • Further, outflows are likely to greatly increase following BitMEX's daily withdrawal time of 13:00 UTC.
  • That's when the exchange processed all withdrawal requests lined up since the previous day.
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Bitcoin outflows from BitMEX
Source: Glassnode
  • Open positions in bitcoin perpetuals (futures without expiry) traded on BitMEX have also declined by nearly 22% from $592 million to $462 million, according to data provided Skew, a crypto derivatives research firm.
  • However, liquidity, as measured by the bid/offer spread, on the exchange remains relatively stable, and the large trades can still be executed at low cost.
  • The daily average spread between the buy and sell orders (bid/offer spread) on BTC perpetuals for a $10-million quote size remains unchanged on the day at 0.34% – near the lower end of the three-week-long range of 0.32% to 0.39%.
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Bid/offer spreads
Source: Skew
  • Bid-offer spreads on other exchanges also remain stable.
  • According to Philip Gradwell, economist at blockchain analysis firm Chainalysis, outflows from BitMEX are adding to liquidity on other exchanges.
  • "Total inflows to exchanges averaged 65,000 bitcoin this last week, so BitMEX withdrawals are adding 25% more liquidity already," Gradwell tweeted early on Friday.
  • "More than 65% of the total outflow has been transferred to other exchanges, while the rest into unhosted wallets," he added.
  • Stable liquidity on BitMEX and other exchanges suggests there's no serious panic among traders following the U.S. charges.
  • According to Denis Vinokourov, head of research at the London-based prime brokerage Bequant, BitMEX's reputation among large trading firms had already been dented by outages seen earlier this year.
  • As such, its overall importance to the broader ecosystem is not as critical as was the case a few years ago, Vinokourov said.

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