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Why didn’t the Kucoin hack or legal action against BitMEX seem to impact Bitcoin?



BitMEX recently faced major U.S. legal action, and KuCoin suffered a significant hack, all inside a several-day span — but why did these events not affect Bitcoin’s price in a more negative way? Aleks Svetski, CEO of Bitcoin investment app Amber, said it has to do with a number of factors, including big players buying Bitcoin (BTC).

“Bitcoin’s price is a function of global demand vs a strict, immutable supply and diminishing schedule,” he told Cointelegraph, referring to the asset’s coin supply and mining payout halvings.

“As more people, especially large scale organisations look to acquire some, it creates not only a price floor, but continues to increase upward price pressure,” he explained adding, “and finally, these new players are all holding their Bitcoin OFF exchanges, and thus it’s not available for sale on the market.”

Over the course of 2020, a number of big players have publicized hefty Bitcoin purchases, including MicroStrategy, Paul Tudor Jones, and Square.

In contrast to the bullish action, crypto exchange KuCoin suffered a hack totaling more than $100 million in theft. Several days later, U.S. government authorities hit major crypto derivatives exchange BitMEX with legal action, arresting one of its leaders.

Neither of these events caused Bitcoin to fall into a downtrend, however. Bitcoin did not fall significantly on the KuCoin news, and only fell several hundred dollars on the BitMEX news — a relatively small reaction to a significant news event. In contrast, after sideways price action for a number of days, the asset began its journey upward out of levels of consolidation. Svetski added:

“This is setting for an extraordinary run and no exchange hack, stimulus delay or state policy will be able to to hold it back.”

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Study finds CME drives Bitcoin price, but it excludes stablecoin volumes



On Oct. 14, Wilshire Phoenix investment firm released its Efficient Price Discovery report, which detailed how CME Bitcoin (BTC) futures impact Bitcoin price discovery.

The firm concluded that “CME Bitcoin futures contribute more to price discovery than its related spot markets.” And the researchers also suggested that:

“CME Bitcoin futures have grown to become significant, this is not only demonstrated through trading volume and open interest, but also by influence on spot price formation.”

Wilshire’s analysis correctly states that price discovery in traditional markets is a contested topic. The report also adds that studies on price formation often find that the futures markets lead most of the time, but this doesn’t mean their conclusions about CME Bitcoin futures are absolute.

According to the report, CME Group, the leading derivatives venue, trades $5.15 trillion per day across its multiple markets. According to Nasdaq data, this number compares to the $430 billion in daily volume seen in the U.S. stock market.

This data shows that the trend of derivatives volumes surpassing spot exchanges by tenfold is the norm rather than an exception.