Bitcoin price cut in half, bloodbath in the cryptocurrency market, OKEx may lose its contract position -

Bitcoin price cut in half, bloodbath in the cryptocurrency market, OKEx may lose its contract position

Text | Fat Duner In the past week, oil prices collapsed, gold prices plummeted, and U.S. stocks were halted... The global capital market was brutally slaughtered. Digital currencies were not immune to this. Bitcoin was cut in half, and other mainstream currencies fell. According to CoinMarketCap data, Bitcoin was still at $9,100 in the early morning of March 8. As...

Author: Nuclear Finance

Text | Fatty

In the past week, oil prices collapsed, gold prices plummeted, and the U.S. stock market was halted... The global capital market was bloodbathed. Digital currencies were not immune to this, with Bitcoin halved and other mainstream currencies falling one after another.

According to CoinMarketCap data, Bitcoin was still at $9,100 in the early morning of March 8, and then it continued to fall. At 10:00 on March 13, Bitcoin briefly fell below $4,200, and hit the largest single-day drop in five years. As of 20:00 on March 15, the current price of Bitcoin was $5,450, and it has not yet broken out of the oscillation range. Other mainstream currencies also experienced similar situations.

Bitcoin Phase Trend

Under this extreme market situation, the contract market was in a bloodbath. According to the data from Hetongdi, in the 48 hours from 18:00 on March 11 to 18:00 on March 13, a total of 269,000 contract players' assets were damaged or wiped out. The two old contract trading platforms, OKEx and BitMEX, became the hardest hit areas for users' liquidation.

Now it seems that the "black swan"-style plunge has almost "slaughtered" all the bulls, and the problem of liquidation losses caused by non-market factors remains to be solved. At the same time, extreme market conditions are also a touchstone for testing contract trading platforms, and risk control technology and mechanisms have once again become the core of the debate.

Liquidation amount hits a new high, and users raise doubts again

On March 12 and 13, there were continuous waterfall market conditions, and the amount of liquidation hit historical highs, reaching US$2.392 billion and US$2.221 billion respectively.

Statistics of liquidation in the last 30 days

Under this situation, the liquidation amount of the top contract trading platforms has become a hot topic in the currency circle. According to the data from Hetongdi, from 18:00 on March 11 to 18:00 on March 12, and from 18:00 on March 12 to 18:00 on March 13, the liquidation amount reached a staggering $3.424 billion and $3.95 billion. Among them, OKEx had the largest liquidation amount, which was $1.502 billion and $1.676 billion, respectively, accounting for 43.86% and 42.2% of the total amount of the entire network; BitMEX was second, with $1.335 billion and $1.564 billion, respectively, accounting for 38.99% and 39.59% of the total amount of the entire network.

Statistics of liquidation amount of top contract platforms

At the same time, the leading contract trading platforms experienced congestion and lag, which had varying degrees of impact on users, and some contract players claimed to have suffered losses as a result.

According to the Nuclear Finance APP, due to the surge in traffic, congestion occurred on Huobi contracts, affecting the normal access of some users. While OKEx had the largest liquidation amount, the system was stuck for nearly an hour, causing the assets of many users to be damaged, and doubts were once again rampant.

Although OKEx CEO Jay Hao apologized on his Weibo, users were not convinced and pointed out who would bear the losses caused by the liquidation due to non-market factors.

Jay Hao Weibo screenshot

This scene seems familiar.

An OKEx contract user told Nuclear Finance APP that we take full responsibility for the user's problems and have no complaints. However, the platform should also bear the corresponding responsibility for the losses caused by the system freeze or machine downtime of the contract trading platform.

"Fighting Marketing" Becomes a Highlight, Cryptocurrency Circle's "Routine" Is Deep

“Without hype and criticism, there is no marketing.” It can be said that the various types of criticism marketing among the top exchanges are dazzling.

On March 12, when the liquidation came like a nightmare, the counter-marketing was also staged as expected. Jay Hao said on his Weibo that the liquidation of other competitors was earlier than OKEx, which means that after Huobi modified the adjustment coefficient a few days ago, there is still a risk of premature liquidation.

Jay Hao said that the liquidation of competitors happened earlier than OKEx

This statement revived the controversy over "early liquidation" that had been dormant for more than half a year.

In fact, the real ***** originated on August 13, 2019. On that day, Huobi officially disclosed that from August 2 to 13, 2019, Huobi's daily contract trading volume and market depth achieved continuous growth, ranking first among global delivery contract exchanges, that is, "Huobi's contract trading volume + depth ranks first in the world", and the "king of contracts" has changed hands.

Screenshot of Huobi official account

Obviously, Huobi's move angered OKEx.

On August 14, OKEx officially issued an announcement on "Initiative on Industry Standards for Forced Liquidation", claiming that "if he has liquidated his position early, I will compensate him."

Screenshot of OKEx official microblog

At the same time, Jay Hao not only denounced the "brushing" behavior of Huobi contracts on Weibo, but also revealed the news that "friendly competitors" had their positions liquidated ahead of schedule.

Perhaps hearing the voice of OKEx, Huobi Contracts first upgraded on March 5 this year, aiming to improve the system's transaction processing capabilities, system response speed and system stability, optimize user trading experience, and build "high concurrency and low latency system performance". Later, on March 9, it issued the "Announcement on Adjusting the Adjustment Coefficients of All Types of Contracts", lowering the adjustment coefficients of various types of contracts.

However, an industry insider who wishes to remain anonymous believes that OKEx may be a master of counter-marketing. "On February 27 and 28, OKEx was attacked by DDos, and it believed that it was done by its competitors, and launched a long-distance challenge with Binance, which was quite lively," he said.

The battle between the "new and old" forces intensifies

In the contract market, a battle between the "new" and the old has quietly begun.

As we all know, the currency market has obvious characteristics of stock game, and contracts have become the "new" gold mining field for various exchanges. Since the second half of last year, the competition among contract trading platforms has become increasingly fierce.

On August 23 last year, the Token Research Institute pointed out in the article “Who is the King of Contracts? — Exploration of Token Derivatives II” that in the comparison of the transaction volume of Huobi and OKEx delivery contracts in 2019, Huobi’s delivery contract transaction volume surpassed OKEx in the first half of August 2019, and its contract throne is in jeopardy.

Comparison of Huobi and OKEx delivery contract trading volumes in 2019

This year, from the perspective of transaction volume data, it seems to be unfavorable for OKEx. According to the data from the Token Research Institute, in terms of the average daily transaction volume in January and February 2020, Huobi led OKEx with 4.16 billion and 5.77 billion US dollars respectively, compared with 3.93 billion and 5.29 billion US dollars of OKEx. In addition, although Binance started later, it has a strong growth momentum, with an average daily transaction volume in February equivalent to about 50% of OKEx.

Comparison of average daily trading volume of top contract platforms

It is worth noting that Huobi currently only has delivery contracts, while OKEx has a richer variety of contract products, including perpetual contracts, delivery contracts, and options contracts.

Recently, Huobi staff revealed that its perpetual contract is on the way. Industry insiders believe that after Huobi's contract products are gradually completed, it is likely to further seize OKEx's market share.

What this means is that OKEx’s contract throne may be lost.

However, after the climax of the contract explosion, the continuous rise in open interest and contract trading volume since the beginning of the year has temporarily stopped. CoinGecko data shows that as of 20:00 on March 15, OKEx ranked first with $670 million in 24-hour open interest, and Huobi ranked second with $327 million; in 24-hour contract trading volume, OKEx ranked first with $3.569 billion, and Huobi ranked second with $2.851 billion.

24-hour open interest and volume ranking

Several senior contract players told Nuclear Finance APP that after this wave of liquidations, competition among the three major contract trading platforms in the Chinese-speaking region will intensify, and OKEx's situation will become even more difficult.

Editor's Statement: Hulian Pulse is a shared and co-built blockchain content publishing platform. Content creators entering the platform must comply with the "Hulian Pulse Contribution Guidelines", "Hulian Pulse Column Platform Service Agreement", "Hulian Pulse Platform Operation Specifications" and other platform regulations. The content of the article is the author's personal opinion, does not represent the position of this website and does not constitute any investment advice. This website has the final right of interpretation of this statement.
If readers find that the manuscript infringes upon copyright, is untrue, or contains errors, please contact us: [email protected]