Bitcoin’s value surged Tuesday evening, rocketing from around $6,450 to nearly $6,900 almost instantly.
The move coincided with scheduled maintenance on BitMEX, a derivatives trading platform for bitcoin and other cryptos. And insiders say the move precipitated some wild trading.
The platform went down at 9 p.m. EST today — which was the exact moment that Bitcoin spiked. Prices peaked at $6,899 before easing back slightly.
Industry insiders indicated the spike appeared to be directly related to the BitMEX shutdown. Hunter Horsely, the CEO of Bitwise, told Business Insider that the shutdown sparked a widespread trade to buy.
“It is a silly short term trade,” he said. “Buy when maintenance starts. Sell when ends.”
In addition, as soon as BitMEX went down a big arbitrage opportunity opened up for traders, according to Dave Weisberger, chief executive officer of CoinRoutes.
“Bitfinex led it up to 6800+, but when GDAX caught up, their clients were paying over $100 too much when the other exchanges all fell back to 6700,” he said. “There was a real arbitrage for a while when this all happened.”
Such price variations were common when bitcoin was running up to $20,000 at the end of 2017, but have since dried up. In such situations, a trader can buy up coins where they are priced lower to sell on venues on which they are priced higher.
The Twitter account for BitMEX stated multiple times that customers were having trouble logging in once maintenance was complete.
The exchange then stated that the login problems had been rectified, and resumed trading at Tuesday evening EST.