Bitcoin Price Takes a Dive as Bitfinex Suspends Fiat Deposits

Bitcoin’s sudden and rapid price collapse on Thursday may have forced one of the world’s largest exchanges to temporarily suspend all fiat deposits. The selloff, which began at roughly 20:00 UTC Wednesday, wiped out roughly $6 billion in bitcoin’s market cap.

BTC/USD Update

The price of bitcoin touched an intraday low of $6,220 on Bitfinex, ending consecutive weeks of stable trading patterns. At press time, BTC was down 5.4% at $6,268.

Sharp declines in the bitcoin price were accompanied by an equally large increase in daily trading volumes. Total market turnover in BTC amounted to $4.7 billion, a gain of nearly $1 billion compared with Wednesday.

At current values, bitcoin has a total market capitalization of $108.6 billion.

Bitcoin’s price collapse triggered a much bigger reversal in the market, with altcoins and tokens losing billions in value. The total market capitalization of all cryptourrencies including bitcoin is $201.2 billion, the lowest since Sept. 20.

Bitfinex Suspends Fiat Deposits

As reported by The Block and CCN, Bitfinex has temporarily halted wire deposits in U.S. dollars, euros, Japanese yen and British pounds – a move that may have stoked heavy volatility in the market. According to users of the digital currency exchange, deposits should resume again within a week. It is not entirely clear whether the deposit freeze played a role in bitcoin’s price collapse.

As of Thursday, Bitfinex was the world’s fourth largest digital currency exchange based on adjusted volume. More than $664 million worth of trades were processed in a 24-hour period, according to CoinMarketCap. That represents a gain of 155% over the previous day, though much of that spike came in response to recent actions.

Bitcoin traded at a hefty premium on Bitfinex through the overnight session, with price data showing a $100+ spread compared with other leading exchanges.

Controversy over Bitfinex’s operations continue to swirl amid allegations the firm is facing insolvency. Although the company has denied this is the case, investors are still weary over its association with Tether, a controversial stablecoin accused of pumping the bitcoin price during the height of the bull market.

In response to the allegations, the firm issued the following statement:

“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… 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.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Tags:
Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi