So much for the bitcoin revival. Bitcoin, the worlds more prominent digital currency, opened lower Friday and is poised for six consecutive daily losses, less than three weeks after it notched six successive winning sessions.
After hovering above support at $7,500 for most of Thursday, bitcoin slumped to a session low of $7,290.02 in early New York trading. A single bitcoin
last changed hands at $7,471.23, down 1.1% since Thursday 5 p.m. Eastern Time on the Kraken exchange.
However, the recent selloff may be the work of one large bitcoin holder. On Friday, Hong-Kong exchange OKEx released a statement saying that it had liquidated a large position (4.2 million contracts valued at $100 each) accumulated on its exchange. “An enormous long position in BTC0928 futures contract was force-liquidated at 20:17:14 July 31, 2018 (Hong Kong Time, UTC+8). Due to the sheer size of the order, our risk management system may be triggered to activate the societal loss risk management mechanism,” OKEx said in a statement.
The societal-loss-risk-management mechanism means some users holding a profit will be subject to a clawback and will surrender some gains to cover their position.
The exchange contacted the unnamed client, but when they failed to respond, the exchange took action.
“However, the client refused to cooperate, which lead to our decision of freezing the client’s account to prevent further positions increasing. Shortly after this preemptive action, unfortunately, the BTC price tumbled, causing the liquidation of the account,” OKEx said.
The massive unfilled Long liquidation of $415 Million has an open loss of -950 BTC that will hurt profitable BTCUSD contract traders of all maturities on @OKEx_ Futures
— Whalepool (@whalepool) July 31, 2018
According to data from CoinMarketCap, OKEx is the second-largest exchange by volume, with just under $1 billion exchanged over the last 24 hours.
UBS not sold on bitcoin as a global currency
More downbeat news hit the wires late Thursday when Bloomberg reported that Swiss banking giant UBS said bitcoin isn’t fit to become a global payment system—an attribute some of the biggest promoters believe it can achieve. “Our findings suggest that bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a mainstream asset class,” the report said.
UBS analysts said the price of bitcoin would need to reach $213,000 before it could replace the entire U.S. money supply.
NYSE parent company to launch digital asset focused company
The Intercontinental Exchange, the company that owns the New York Stock Exchange, announced Friday it will launch a new company that will enable consumers to transact, store and spend digital assets, leveraging off Microsoft’s cloud services.
The company, Bakkt, will include federally regulated markets and will begin by offering clients the ability to trade and convert bitcoin against fiat currencies, which will include a one-day physically delivered bitcoin contract, which is subject to CFTC approval.
The news is a boost for the digital asset market that was dealt a blow when on July 26, the Securities and Exchange Commission rejected a bid by Cameron and Tyler Winklevoss for the first-ever, bitcoin-related exchange-traded-fund.
Futures under pressure
Bitcoin futures have followed spot lower. The Cboe Global Markets Inc. contract
is down 1% at $7,465 and the CME Group Inc.’s August contract
is trading at $7,475, down 0.7%.
Altcoins are off to a mixed start Friday. Ether
has gained 0.6% to $412.56, Bitcoin Cash
is trading down 2.1%, at $720.20, Litecoin
is unchanged at $76.16 and Ripple’s XRP
is trading 1.9% higher at 44 cents.
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