New bitcoin world record: 1m BTC traded on one exchange in one day
Big market movements put a lot of wheels in motion, and some exchanges spin them better than others.
A new record was cracked in the 24 hour trading period closing 24 July, with more than 1 million bitcoin being traded on the BitMEX exchange that day.
Specifically, it was 1,041,748 BTC, conservatively valued at about US$8.334 billion at the time, assuming average prices of $8,000. The previous record was about 800,000 BTC, also held by BitMEX.
The frenetic trading volume came as bitcoin crested $8,000 to new 60 day highs, on the back of good news including a positive outlook on bitcoin ETFs and a promising G20 summit which points at a new level of crypto regulatory clarity for large institutions in October.
BitMEX CEO and co-founder Arthur Hayes naturally attributes part of the surge to bitcoin's price growth, but also points at BitMEX's capacity increases.
"The astronomical surge in trading volume, coupled with the steadily rising price of bitcoin, is reflective of the market's increasingly sophisticated understanding of the potential of bitcoin to redefine global markets. The achievement was also largely thanks to ongoing capacity increases accomplished by scaling our engine architecture," he said.
Signs of growth
"The record that BitMEX has set marks a major milestone in the cryptocurrency industry’s overall path to maturation," Hayes said. "I am delighted that BitMEX’s easy-to-use and highly secure trading application has helped to onboard yet another tidal wave of people from all around the world to the crypto market and given them the confidence to participate on the largest scale ever seen."
If there was any exchange that would crack this new record, it would probably be BitMEX.
Firstly, it held the previous record and secondly it's been focusing on scaling upwards to accommodate increasingly high volumes from more traders.
But thirdly, it's focused largely on high volume professional and institutional traders, and this area in particular has been growing even as the slumping prices – relative to December/January – deter smaller retail investors.
And fourthly, the recent bitcoin run was accompanied by an unusual decoupling of bitcoin and altcoin prices. While this is unusual in itself, it's also worth noting that altcoins have typically been more susceptible to overall market movements, in both directions, relative to bitcoin. This suggests that the last week has seen a disproportionate flow from altcoins to bitcoin. BitMEX might have been in a better position than many other exchanges to capitalise on this shift, with deep liquidity and derivatives available for coins other than bitcoin.
Fifthly, BitMEX is known for exceptionally deep BTC/USD liquidity. According to BitMEX, it has about 1,500% more bitcoin to USD liquidity than any other platform. While the price movements suggest a flow from altcoins to bitcoin, CoinMarketCap and similar tracking sites have also been showing an unusually large amount of fiat to crypto trades.
This double-up might be one of the reasons why the recent price jumps were so stark, and BitMEX was in a position to catch a lot of volume from both. On top of that, the more drastic the price swings, the more likely traders are to use BitMEX derivatives as a tool for hedging risk.
A lot of cogs start turning when the markets move, and the exchanges that lock together the most gears are in the best position to capitalise on it.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA