The amount of Bitcoin held by crypto exchange BitMEX has drastically dropped in the past two weeks after the exchange experienced a massive liquidation spiral on Mar. 13. According to data from CoinMetrics, BitMEX currently has around 244,000 BTC, a 22.5 percent drop from its 315,000 BTC peak on Mar. 13.
BitMEX sees its Bitcoin reserves dry up after mid-March market crash
The crypto market took one of the heaviest blows in its history on Mar. 12, as most cryptocurrencies saw more than 50 percent of their value wiped out. Most of the losses Bitcoin took on happened on BitMEX, one of the largest cryptocurrency and derivatives exchanges in the world.
At one point, Bitcoin saw its value fall as low as $3,700 on BitMEX, causing a slew of liquidations that have continued to rock the company for two weeks straight. Namely, the latest data from CoinMetrics showed that the amount of Bitcoin held by the exchange has been in freefall since Mar. 13.
According to the company’s State of the Network report, BitMEX currently holds around 244,000 BTC. While the number is high in itself, it represents a 22.5 percent decrease from the peak deposit levels it saw on Mar. 13, when it held 315,000 BTC.
Massive Bitcoin withdrawals from BitMEX set to continue
The drastic decrease of BitMEX’s Bitcoin holdings was caused by an equally drastic increase in Bitcoin withdrawal. Earlier this week, CryptoSlate reported that more Bitcoin has been withdrawn from the exchange in the past two weeks than that was deposited.
This, data from TokenAnalyst has shown, resulted in a net flow of -67,000 BTC, valued at over $400 million.
While it’s hard to say what exactly is to blame for the huge hit BitMEX’s Bitcoin deposits took this month, there are several things that could have led to it. Firstly, this monumental outflow of Bitcoin from BitMEX could have come as a result of the heavy promotion of other trading platforms such as ByBit and FTX. The exchange’s sudden outage on Mar. 12 forced many high-frequency and high-volume traders to seek other, more stable platforms.
Aside from that, rumors about the potential increase in KYC and AML requirements on BitMEX might have had an adverse effect on its traders.
Some have even argued that BitMEX is losing dominance as a margin-enabled cryptocurrency exchange due to the growing propensity to “HODL” Bitcoin.
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