Market Wrap: Blame BitMEX as Bitcoin Dumps to $10.4K; Record Month for Ethereum Fees

Oct 1, 2020 at 20:32 UTCUpdated Oct 2, 2020 at 01:58 UTC.Derivative exchange BitMEX's legal issues with U.S. regulators took a toll on bitcoin's price while DeFi gave Ethereum miners more fee revenue than ever.

The drop coincided with the announcement crypto derivatives venue BitMEX was formally being charged by U.S. regulators for unregistered trading, among other transgressions.

"The news of BitMEX being served with a lawsuit by the was met with broad-based selling pressure," said Denis Vinokourov, head of research for crypto brokerage Bequant.

Shah noted the declining influence of BitMEX on the market since March, when over $700 million in liquidations helped cause the price of bitcoin to dump as low as $3,854 on spot exchanges.

A number of new derivatives venues, most of which do not provide access to anyone in the United States, is one of the reasons for BitMEX's decline in the market, said Bequant's Vinokourov.

"Not only have many other exchanges been catching up with BitMEX liquidity and order book depth, but also a widely publicized tech issue earlier this year put a big dent into venue's reputation amongst the larger crypto trading desks."

Liquidations on BitMEX helped push bitcoin's price down Thursday, as $15 million in sell liquidations in the past 24 hours wiped out long-oriented traders on the derivatives platform, similar to a margin call in traditional markets.

Outside of BitMEX, macro economic events could lead to selling pressure as October opens, according to Andrew Tu, an executive at crypto quant trading firm Efficient Frontier.

The second-largest cryptocurrency by market capitalization, ether, was down Thursday trading around $353 and slipping 0.83% in 24 hours as of 20:00 UTC.As increasing numbers of users adopt decentralized finance, or DeFI, on Ethereum, miners are reaping more revenue from the network than ever.

Miner revenue from fees charged to use Ethereum averaged 38% in August, which was then a record high.