Last week, a fiasco that included BitFinex and Tether, when New York's Attorney General Letitia James had to consider a court order, investors expected the cryptogram market to become bearish. The bitcoin rate against the US dollar (BTC / USD) initially changed to bearish and fell below $ 5,000 to $ 4971. However, every surprise ended a busy week of trading over the sought-after psychological support of about $ 5,000 per bitcoin.
The problem is that there is a significant difference between the BTC / USD price on most cubic currency exchanges and BitFinex.
On Sunday, BTC / USD on the popular cryptocurrency Coinbase exchange was trading around $ 5,190. At the same time, BitFinex quoted the BTC / USD price for nearly $ 5,500!
If we carefully examine BTC / USD Coinbase and BitFinex line graphs from the beginning of the week, it is clear that they are different from time to time on these two exchanges. The fact is, it is perfectly normal to have a small difference in the price of any commodity between stock exchanges due to the difference in the volume of trades and the conditions of supply and demand.
The crypto community is used to price differences between BitFinex and other stock exchanges such as BitMEX, but when the price difference reaches a significant $ 300, which is about 6%, analysts have plunged into finding the cause of this significant difference.
Why BitFinex Quotes Bitcoin Award So High
If you followed the Bitcoin price gap between BitFinex and other crypto currency exchanges, this should not be a surprise.
In fact, if there is such a big price difference, anyone who has a basic knowledge of finance and an efficient market hypothesis will argue that it offers a good opportunity for arbitrage. So why does no opportunistic trader use arbitrage?
However, the best explanation he came Jeff Garzik, co-founder of Bloq Inc.
It's a purchase purchase. To get out of the stock exchange, they have to buy "hard currency" – BTC – when fiat methods fail. The BTC price is therefore higher for dying stock exchanges.
We have seen this data pattern many times in the past, including, but not limited to, MtGox.
– Jeff Garzik (@jgarzik) t April 26, 2019
It seems logical that Bitcoin's low-volume BitFinex offer is actually a platform-based investor that buys Bitcoin at a higher price to get out of the stock market. After all, with all the suspicious activities at BitFinex, every rational investor would like to pay a small reward to exchange their money from the stock exchange. During these times, as we now claim $ 850 million, the difference tends to be broader.
While market analysts expected Bitcoin to become bearish, in fact, cryptofrequency currency investors showed tremendous pressure resistance and kept the BTC / USD price above $ 5,000. However, as in crypto, something can happen.