- Bitmex fiasco related to XRP going down, it went down to $0.14 from $0.32 on Bitmex, and the price drop in Bitcoin has created a buzz on Twitter.
- Changpeng Zhao, the CEO of Binance, gave his opinion on this matter.
- Binance was not affected by this decline, and instead of seeing losses, Binance managed to increase its profit by 66 percent during this period.
After the recent Bitmex fiasco related to XRP going down, it went down to $0.14 from $0.32 on Bitmex, and the price drop in Bitcoin has created a buzz on Twitter. People are arguing if an omnipotent exchange of cryptocurrency can affect the pricing.
In a tweet, Changpeng Zhao, the CEO of Binance, gave his opinion on this matter. He tweeted as a response to a thread regarding this matter. He said that if these exchanges actually affected the price, then they would be very high as exchanges are something that works exceptionally well when the prices are high.
Yeah, if exchanges could impact price. They would be super high. Exchanges do much better when prices are high.— CZ Binance ??? (@cz_binance) February 16, 2020
This statement signifies that exchanges are a part of the bigger system that contributes to the prices of cryptocurrency. A transaction no matter how big it is, it will not be capable of changing the price by a considerable margin.
What Changpeng Zao said is certainly true, an excellent example of this statement regarding exchanges work much better when the prices are high can be seen in the case of Bitcoin. He wants the Bitcoin to grow, and in his earlier tweet, he mentioned how Bitcoin traders who were furious when they sold Bitcoin before it reached $10,000 mark.
However, if they waited for a couple of months for it to reach that point, then they would have been even more furious as its value actually decreased by 20 percent in two months.
On 1st November 2019, Changpeng Zao said that Bitcoin would reach a $16,000 price. Instead, they came down to $6,500 during the same month.
There is a phenomenon known as crypto winter when cryptocurrency exchange platforms see a loss. However, Binance seems to be unaffected by that. There was one such crypto winter in 2018 where the crypto market saw a decline.
Binance was not affected by this decline, and instead of seeing losses, Binance managed to increase its profit by 66 percent during this period.
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