Bitcoin and other Altcoins are going through a phase of the bear market, having reached new lows. However, according to analysts, there have been factors that have kept the price of Bitcoin stable over the past few months.
A research from CryptoCompare suggests that South Korean cryptocurrency exchange Bithumb may have contributed to the recent hike, at least indirectly. The report shows that there were several promotions on the Bithumb exchange that might have played an important role in helping Bitcoin’s price to be sustained.
The volume promotion by Bithumb seems to have caused several months of stabilization for Bitcoin. However, this is a theory that is not proved and there are other issues that could have influenced the markets to behave in a specific way.
Commenting on the report, Mati Greenspan, senior market analyst at eToro, said that while Bithumb should probably not be blamed for the recent Bitcoin price collapse, the crypto exchange’s trading promotion may have helped the market remain stable for longer than it anticipated.
“If these findings are indeed accurate, I would say that blaming South Korea for the drop wouldn’t exactly be correct. More likely, it appears that the volume promotion by Bithumb caused several months of stabilization in prices, to begin with.”,
Greenspan wrote in the daily market commentary.
Bithumb is one of the largest virtual currency exchanges in the market. It has handled 1.42 billion U.S. dollars in trading volume in the last 24 hours.
Bithumb featured a program called Super Airdrop Festival between recently. At the same time, it offered a special gift promotion for new registrations. After the end of these programs, the market suffered a slump.
Bitcoin lost around 40% of its value in just a few weeks and the whole cryptocurrency market lost a sum equal to 50% of its value.
The report details that “Bithumb saw a 284% increase in volumes from the previous average of 323 million USD for the Sept/Oct period. This increase in volumes follows after Singapore-based BK Global Consortium bought a controlling share in the exchange in recent months, and later implemented a series of airdrop competitions, raffles, rebates, and other programs designed to incentivize non-Korean users to sign up to the exchange and trade in exchange for rewards.”
We are witnessing crypto exchanges being more profitable than large banks. With such potential, certain exchanges maintain vital balance of crypto space.