Bithumb May Have ‘Pumped Up’ The Bitcoin Price For A Few Hours

In the latest Bitcoin news, we are all monitoring the price movement of the leading cryptocurrency out there and its fresh yearly low which was touched last morning, leaving traders and investors uncertain about whether Bitcoin will finally hit a bottom.

According to research from CryptoCompare, however, the South Korean cryptocurrency exchange Bithumb supposedly took advantage of this drop and contributed to the recent sell-off – at least in an indirect way.

As Bithumb’s CCCACG (CryptoCompare’s Aggregate Pricing Index) shows, the exchange led all crypto exchanges in daily volume from October to November and averaged about $1.24 billion in daily turnover. This represented a month-over-month increase of 284% even while Binance which is the leader in exchanges endured a 34% decline in volume this month.

Unsurprisingly, the volumes of Bithumb were not organic which is why many crypto aggregators still list Binance as the world’s highest volume cryptocurrency exchange. Rather, the increased volume for Bithumb may correlate with several trading promotions which appear to have enabled the exchange to ramp up its daily volume, even as the number of active traders decreased.

As the report notes:

“Bithumb saw a 284% increase in volumes from the previous average of 323 million USD for the Sept/Oct period. This increase in volumes follows after Singapore-based BK Global Consortium bought a controlling share in the exchange in recent months, and later implemented a series of airdrop competitions, raffles, rebates, and other programs designed to incentivize non-Korean users to sign up to the exchange and trade in exchange for rewards. They have also implemented a potential form of trans-fee mining for certain users, where trading beyond a specific volume is rewarded in the form of “Bithumb Cash” at a later date.”

Mati Greenspan, who is a senior market analyst at eToro, commented on the report stating that Bithumb should not probably blamed for the recent Bitcoin price crackdown – but its trading promotion may have helped the market remain stable for longer than it would otherwise.

“If these findings are indeed accurate, I would say that blaming South Korea for the drop wouldn’t exactly be correct,” Greenspan wrote in daily market commentary shared with CCN. “More likely, it appears that the volume promotion by Bithumb caused several months of stabilization in prices, to begin with,” Greenspan noted.