Newsflash: Bitfinex Suspends Fiat Deposits amid Bitcoin Sell-Off

Did cryptocurrency exchange giant Bitfinex play a role in last night’s bitcoin sell-off?

As first reported by The Block, the British Virgin Islands-based but Hong Kong-operated exchange has “temporarily paused” EUR, USD, JPY, and GBP wire deposits, although screenshots from customer accounts circulated on social media suggest that the situation should “normalize within a week.”

Bitfinex's EUR, USD, JPY, GBP wire deposits are temporarily paused.
Things are expected to resume in a week.$BTC #Bitcoin #Bitfinex pic.twitter.com/ZezjJ4jiib

— Squeeze (@cryptoSqueeze) October 11, 2018

Reports had emerged last week that Bitfinex, long suspected to be holding funds at the now-faltering Noble Bank in Puerto Rico, had found a permanent banking partner in HSBC.

Per The Block, Bitfinex was actually banking at Bitfinex through a private account via Global Trading Solutions. Consequently, it’s possible that HSBC was not aware that it was holding Bitfinex assets, and — following the significant press coverage — has suspended or closed that account. If true, it marks the conclusion of another short chapter in Bitfinex’s long history of banking woes.

The cryptocurrency market has faced a significant sell-off on Thursday, raising questions about whether there is a connection between the decline and concerns over Bitfinex’s oft-opaque operations.

bitcoin price
BTC/USD | Bitfinex
At present, the bitcoin price is trading at a premium on Bitfinex, perhaps indicating that traders are not entirely comfortable holding funds on the platform during this period of uncertainty, which also raises questions about the stability of fiat withdrawals.

Bitcoin is currently priced at $6,303 on Bitfinex, compared to $6,199 on Coinbase Pro on Gemini, $6,194 on Bitstamp, and $6,192 on BitMEX, which works out to a premium of nearly two percent.

Bitfinex, as CCN reported, published a blog post earlier this week denying allegations that it is insolvent, though many critics remain unconvinced, particularly given the exchange’s close association with the controversial tether (USDT) cryptocurrency.

“How any rational party can claim insolvency when the opposite is there for all to see is interesting and, once again, perhaps indicative of a targeted campaign based on nothing but fiction,” the firm said in the post. “Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations. However, we continue to do our utmost to minimise any waiting times associated with fiat deposits and withdrawals.”

CCN has reached out to Bitfinex’s external media contact and will update this article if we receive a reply.

AUTHOR
Josiah Wilmoth
Josiah is an assistant editor at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. He holds investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.

BITCOIN OPINION 2 HOURS AGO
‘Strong Possibility’ Bitcoin Bubble Could Burst in the Near Future, Report Claims
bitcoin bubble
A study conducted by market research firm Juniper Research has cast doubts on bitcoin’s long-term prospects owing to various factors stacked against it including regulatory scrutiny.

Per Windsor Holden, the author of the report titled ‘The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023’ the lack of ‘intrinsic value’ in the flagship cryptocurrency portends doom:

“Bitcoin has no intrinsic value. Like any asset, it is worth whatever someone is prepared to pay for it, but it has no meaning or existence beyond the confines of the ledger. It is a bubble, and there is a strong possibility that this bubble could burst in the near future.”

Lower Daily Transaction Volumes and Values
The study noted that both the daily transaction volumes and the daily transaction values of bitcoin had fallen from the record highs witnessed late last year. In late 2017, for instance, the daily transaction volumes averaged approximately 360,000 but in September 2018 this had fallen to 230,000.

The daily transaction values, on the other hand, had reached a figure of over US$3.7 billion late last year but in September the amount had declined to under US$670 million.

According to Juniper Research, the fall in bitcoin’s price happened despite the fact that leading fiat currencies have continued to be weak as a result of various factors in the global economy occasioned by the trade conflicts between the United States and China as well as the uncertainty surrounding Brexit among others.

“…if Bitcoin cannot make gains in such favourable circumstances, then it is unlikely to prosper as and when these issues are resolved,” the study concludes.

Hostile Environment
Some of the factors blamed for holding back bitcoin in the report include the restrictions imposed by governments on cryptocurrency exchanges as well as the advertising bans which were effected by tech firms such as Twitter and Google. The latter partly rescinded the ban recently, as CCN reported.

Additionally, the participation of casual investors has been limited following a decision by major banks to ban the use of their credit cards in making buying bitcoin.

While bitcoin has seen more than its fair share of prophets of doom, not everyone is betting against it. As recently as late last month, tech billionaire Tim Draper repeated his projection that the price of the flagship cryptocurrency will hit US$250,000 by 2022.

And two months ago, regular CNBC guest and co-founder of Fundstrat Global Advisors, Tom Lee, reiterated his forecast that bitcoin will be trading in the US$20,000 range by the end of this year.

Source; CCN News