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The price of bitcoin reached the highest level
observed at any time, on any exchange today, reaching $1,411 on British Virgin Islands-based Bitfinex. However, far from a rallying cry for bitcoin enthusiasts, the bitcoin price has emerged as an outlier among those offered by its global peers. At this value, bitcoin on Bitfinex was trading more than $130 higher than it was on OKCoin, nearly $100 above its price on Kraken and roughly $90 higher than Coinbase's GDAX exchange.
Notably, the cryptocurrency's price on Bitfinex was also trading more than $100 above the price of the CoinDesk Bitcoin Price Index (BPI), an index from which it was recently suspended. At press time, bitcoin was trading at $1,299, just below its all-time high of $1,325. At the time of the report, the cryptocurrency’s price had pared these gains somewhat, trading at roughly $1,410.00. But, as for what to make of the increase, traders have been less clear.
On one hand, the cryptocurrency's price rallied in spite of the industry's ongoing scaling dilemma and continued banking challenges, while on the other, those very issues have stoked concerns across the ecosystem. When asked about the sentiment among traders, BTC VIX, organiser of bitcoin trading community Whale Club, said there are now concerns Bitfinex "may never have access to USD clearing again", and that this was creating a "Bitfinex premium" in the market. The result, he alleged, has been heightened bitcoin buying amid concerns that access to fiat funds at exchanges could decline.
Indeed, spreads have widened as cryptocurrency exchanges – most notably Bitfinex – have struggled with ongoing banking challenges that are preventing customers from making formerly routine deposits and withdrawals. However, the exchange is not alone, as OKCoin and BTC-e have also recently reported issues with US dollar transfers. Earlier this month, Bitfinex announced that it was experiencing delays in its outbound wire transfers as a result of problems involving its Taiwan banks. Bitfinex cited the refusal of Wells Fargo, it's correspondent bank to process these transactions as causing the problem.
Only days after revealing this challenge, the exchange announced that it was refusing incoming wires. At the time, the spread between Bitfinex bitcoin prices and prices on other exchanges widened, rising to more than $90 in some cases.
Chuck Reynolds
Contributor
