On the 29th of December, the team at Bitfinex and Ethfinex gave an advanced notice to users of both platforms that there will be a three to seven hour long upgrade that will involve data migration to their new bare-metal servers. This move is meant to enhance platform speed, security and performance. Both platforms will be offline on the 7th of Janaury at 10 am UTC.
The team confirmed the timing of the event via the following tweet.
Why Traders Expect Some Volatility During the Bitfinex Upgrade
Many traders are probably remembering the ‘pump’ that took place on the 22nd August 2018, when Bitmex went offline due to a scheduled maintenance. On that day, BTC climbed by more than $400 in a matter of 20 minutes ($6,400 to around $6,800). The explanation that was postulated by traders, was that there were no active BTC short positions to drive the value of Bitcoin down.
This theory holds water given that Bitmex is currently handling a 24 hour Bitcoin trade volume of $664.545 Million out of the total of $4.928 Billion. This is 13.5% of the entire Bitcoin trade volume in a 24 hour period.
Why the Bitinex Upgrade Might Cause Limited Volatility
Further checking coinmarketcap.com, we find that Bitfinex is ranked 13th with a current 24 hour trade volume of $198.8 Million. In the case of Ethfinex, it is ranked 93rd at the moment of writing this with a 24 hour trade volume of $1.89 Million.
The total 24 hour trade volume of the crypto markets currently stands at $16 Billion, therefore these two exchanges currently cater for around 1.25% of the total crypto trade volume.
Bitfinex’s 24 Hour BTC Trade Volume
Checking BTC trade volume, Bitfinex is currently handling $51.4 Million of the total 24 hour Bitcoin trading volume of $4.928 Billion. This is a a little over 1% of the total BTC trade volume.
Comparing the amount of Bitcoin volume that is traded on Bitmex to that being traded on Bitfinex, it is safe to conclude that the 3 to 7 hour upgrade might not cause much volatility as was witnessed on the 22nd of August when Bitmex went offline. The Bitmex 24 hour Bitcoin trade volume eclipses that of Bitfinex by a factor of 13.
However, 1% of the total BTC trade volume being inactive during the server upgrade by Bitfinex will still cause some volatility but not to the magnitude that many crypto traders expect.
Perhaps what might cause some price movement, is the general psychology of crypto traders who assume that Bitfinex going offline will prop the value of Bitcoin a few hundred points up.
What are your thoughts on the effect of the 3 to 7 hour Bitfinex/Ethfinex upgrade scheduled for tomorrow? Will we see much volatility? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.