Spreads Widen at Bitcoin Exchanges Amid Bitfinex Banking Issues

Bitfinex’s banking issues appear to be affecting the wider bitcoin exchange markets.

As fiat withdrawal problems at the world’s largest US dollar bitcoin exchange continued today, the spread between bitcoin prices observed on Bitfinex and other international exchanges surged, rising to more than $90, or roughly 7%, in some cases.

At approximately 17:15 UTC, for example, bitcoin traded at $1,325 on Bitfinex, roughly $92 (or 7% higher) than the price of $1,233 observed on itBit, according to data from the CoinDesk Bitcoin Price Index (BPI).

The spread was similar on Bitstamp and CoinBase’s GDAX exchange – where the digital currency traded at an $85 spread at that time. The difference was smaller when observed on OKCoin, though OKCoin has also reported banking issues in recent days.

These figures were sharply higher than the start of the session, when bitcoin was trading at $1,265 on Bitfinex, approximately $50 higher than the price on both itBit and GDAX, according to data from the CoinDesk BPI.

At press time, these price gaps continued to be outsized with a $60 spread observed between Bitstamp and GDAX and Bitfinex.

Wire transfer difficulties

The development follows Bitfinex’s announcement today that it is unable to send wire transfers overseas due to challenges with its correspondent banks. At first, Bitfinex claimed it was informed by these financial institutions that the exchange lacked the ability to process transfers involving Hong Kong dollars and Swiss francs.

While the exchange said it was able to make some transfers involving these fiat currencies, the financial institutions later informed Bitfinex it would no longer be able to make transfers using these currencies.

These difficulties come days after Bitfinex announced on 13th April that its USD withdrawals were suffering delays. On 17th April, it further said its Taiwan-based banking providers were refusing incoming wire transfers.

At the time, the exchange emphasized that it was working on “alternative solutions” that would allow its customers to make deposits and withdrawals using fiat currencies.

Uncertain context

Still, while this has stoked worries about a Mt Gox-style insolvency, the exchange vehemently denied these allegations today.

It’s worth noting, too, that Bitfinex has a history of bouncing back from issues as well, as it recently finished paying back users for a $65m hack experienced early last August.

While it remains to be seen how the situation will unfold, with BTC-e and OKCoin joining Bitfinex in announcing banking issues, the developments have sparked some fears of wider crackdowns on exchanges.

BTC-e representatives told CoinDesk its issue had to do with a third-party payment service, Mayzus, one it reported happens multiple times a year.

As such, it’s possible the uptick in issues is merely reflective of the tough environment bitcoin businesses have always faced when seeking to secure banking partnerships.

Suspension bridge image via Shutterstock

BitfinexExchanges

Comments

comments

Filed in: Bitcoin Buzz Tags: ,

You might like:

Vivid History: 'How Money Got Free' Is the Untold Story of Bitcoin Vivid History: 'How Money Got Free' Is the Untold Story of Bitcoin
Untangling Bitcoin: Why Russell Yanofsky Is Taking Apart Crypto's Oldest Code Untangling Bitcoin: Why Russell Yanofsky Is Taking Apart Crypto's Oldest Code
Welcome to Bitcoin Country: Silk Road and the Lost Threads of Agorism Welcome to Bitcoin Country: Silk Road and the Lost Threads of Agorism
Better in Byzantium? Ethereum Takes Baby Steps Toward a Privacy Boost Better in Byzantium? Ethereum Takes Baby Steps Toward a Privacy Boost
Money Manager Josh Brown: 'ICOs Are Where The Frauds Will Take Place' Money Manager Josh Brown: 'ICOs Are Where The Frauds Will Take Place'
EU Budget Amendments Call For Millions in Blockchain Funding EU Budget Amendments Call For Millions in Blockchain Funding
ICO Creator And Coinme Team Up To Spread Bitcoin ATMs ICO Creator And Coinme Team Up To Spread Bitcoin ATMs
China shutting down Bitcoin exchanges China shutting down Bitcoin exchanges
© 2017 Virtual Mining Bitcoin News. All rights reserved. XHTML / CSS Valid.