Silk Road-Related Auction, Bitfinex Timeout Responsible for Slide in Bitcoin Price

A Bitfinex maintenance delay and the auctioning off about $19 mln worth of Silk-Road-related Bitcoins thought responsible for the drop in the price of Bitcoin on Monday and Tuesday.

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Silk Road-Related Auction, Bitfinex Timeout Responsible for Slide in Bitcoin Price

A maintenance delay in the leading Bitcoin trading platform and the auctioning off about $19 mln worth of Silk-Road-related Bitcoins in Australia could have been responsible for the drop in the price of Bitcoin on Monday and Tuesday.

From a range of as high as $760 over the weekend, the currency dropped to $698 on Monday.

Several Bitcoin traders lost some of their investments as they couldn’t close their deals, while others question the need to sell what they have at this point in time.

Bitfinex maintenance delay

Despite the fact that Bitfinex just had a scheduled maintenance which lasted for approximately one hour on June 17, trading on the website was paused on Monday June 20 at about 21:35 UTC.

Update - Working on recovering from an internal network issue.
Jun 20, 22:19 UTC
Identified - Trading has been paused while we investigate an infrastructure issue impacting the trading engine. The issue does not involve funds or system security. We will resume normal operations as soon as possible.
Jun 20, 21:35 UTC
Investigating - We are experiencing platform issues. We are investigating and will resume normal operations as soon as possible.
Jun 20, 21:11 UTC

According to coinmarketcap.com which compiles Crypto-Currency Market Capitalizations, Bitfinex is the largest Bitcoin trading platform with a grip on 20% of the market while the remainder 80% of the market is controlled by 85 other platforms. Poloniex is the closest to Bitfinex with 9.17%. Seventy others have less than 1% market share each. Bitfinex’ high volume has a stabilising effect on the market.

So when a pause button is pushed on a platform like Bitfinex, the market is bound to feel its impact. The impact is still likely to extend into Tuesday June 21 considering that after resumption earlier in the day, the company has had to take the site down again, citing datacenter network instability

Investigating - We have elected to take the site down due to network instability within our datacenter. We are working with our hosting provider to get the issue solved and will continue to update this page.
Jun 21, 09:28 UTC

Australian auction

June 20 also marked the flooding of the market with about $19 million worth of Bitcoin in an auction held in Australia. The bitcoins are proceeds of crime as part of the civil forfeiture connected to the conviction of Ross Ulbricht for running the Silk Road drug marketplace last year.

With the bulk of the bidders expected to be digital asset investment managers, digital currency exchanges, investment banks and hedge funds mostly from North America and Europe, they will go a long way to take advantage of the price volatility that has reduced on the large holding of Bitcoin to be auctioned. Worthy of note is that it will be a 48-hour sealed auction. The end of Tuesday June 21 completes the 48 hour period.

Possibly Brexit is also a factor

Honourable mention should also be made of the coming BREXIT referendum coming up in two days June 23. The BREXIT factor was cited as one of which were responsible for the spike in Bitcoin price a week ago. 

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