BitMEX’s Bitcoin (BTC) Insurance Fund Is Now Worth $77 Million
Cryptocurrency trading platform BitMEX, which allows investors to leverage their positions up to 100x, has reportedly grown its Insurance Fund to more 21,366 BTC — worth roughly $77.5 million.
According to data recently made available by BitMEX, the Insurance Fund has grown to its current level after starting 2018 with only 162 BTC. BitMEX uses the Insurance Fund to avoid auto-deleveraging in traders’ positions by targetting unfilled liquidation orders before they are taken over by the auto-deleveraging system.
As a result, the Insurance Fund grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price. In lamens, as more traders get rekt, the larger this fund grows.
While the total dollar amount has been higher in the past when Bitcoin was trading at a higher price, the total Bitcoin held in the fund has steadily grown over the past year.
In a recent tweet, Zack Voell, a crypto research analyst known for his charting, compared the growth of BitMEX’s insurance fund against Bitcoin’s price. As the chart below shows, the two display an interestingly strong inverse relationship.
While correlation does not necessarily imply causation, the fact that bullish investors continue to lose out in the ongoing crypto winter has likely played a significant role in the growth of the Insurance Fund.
Bitcoin is currently up 1% over the last 24 hours to $3,624, bringing the largest digital currency to a $63.4 billion market cap.
More: BitMEX Insurance Fund
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.