Bitcoin Starts Shrugging Off BitMEX Bombshell, Recoups Nearly Half of 4% Price Dip

Bitcoin traders have begun recovering from Thursday’s bombshell indictments from the U.S. Commodity Futures Trading Commission and Department of Justice against BitMEX and the exchange’s co-founders Arthur Hayes, Benjamin Delo and Samuel Reed, and Business Development Lead Greg Dwyer.

• Bitcoin (BTC) initially dropped 4% from roughly $10,800 on BitMEX futures on the news, a relatively modest move for typically volatile cryptocurrency markets. Early last month, for example, BTC made three consecutive 7%-8% dips Sept. 2-3 after trading above $11,000 for the first time this year.
• “There was some expected negative price action following the dissipation of the BitMEX lawsuit, but the market has seemingly settled a few percent down from where it was beforehand,” said Sam Trabucco, quantitative trader at Alameda Research.
• Alternate cryptocurrencies (altcoins) followed BTC’s lead Thursday afternoon with the decentralized finance sector of altcoins dropping less than 3% over the past 24 hours, according to Messari.
• Thursday is historically the most volatile day of the week, according to cryptocurrency research firm Markets Science. But “it’s not yet clear whether the market as a whole decides the impact we’ve already seen is sufficient,” said Trabucco.
• At last check, BTC has retraced almost half of the intraday dip as buyers pushed the price from $10,450 to $10,580 on BitMEX.
• The market’s immediate reaction Thursday may only be the precursor to more volatility, however, Trabucco told CoinDesk. “We’ll see how the markets that are currently mostly asleep react. I’d expect increased potential for volatility as more people are able to react.”
• If Thursday’s minor dip cascades into a larger sell-off, “It’s going to be a buying opportunity,” said Steve Ehrlich, CEO of Voyager Digital, a publicly listed cryptocurrency exchange. “Whatever gets liquidated, will get liquidated, and the markets will reposition and start growing again.”
• As traders react to the news, BitMEX assured its customers that "the BitMEX platform is operating entirely as normal and all funds are safe," according to a message published to its announcements channel on Telegram.
• The Seychelles-based business, known for pioneering perpetual swap futures in cryptocurrency markets, ranks fourth by 24-hour volume and second by open interest, according to Skew.