Bitfinex's banking issues appear to be affecting the wider bitcoin exchange markets.
As fiat withdrawal problems at the world's largest US dollar bitcoin exchange continued today, the spread between bitcoin prices observed on Bitfinex and other international exchanges surged, rising to more than $90, or roughly 7%, in some cases.
At approximately 17:15 UTC, for example, bitcoin traded at $1,325 on Bitfinex, roughly $92 (or 7% higher) than the price of $1,233 observed on itBit, according to data from the CoinDesk Bitcoin Price Index (BPI).
The spread was similar on Bitstamp and CoinBase's GDAX exchange – where the digital currency traded at an $85 spread at that time. The difference was smaller when observed on OKCoin, though OKCoin has also reported banking issues in recent days.
These figures were sharply higher than the start of the session, when bitcoin was trading at $1,265 on Bitfinex, approximately $50 higher than the price on both itBit and GDAX, according to data from the CoinDesk BPI.
At press time, these price gaps continued to be outsized with a $60 spread observed between Bitstamp and GDAX and Bitfinex.
The development follows Bitfinex's announcement today that it is unable to send wire transfers overseas due to challenges with its correspondent banks. At first, Bitfinex claimed it was informed by these financial institutions that the exchange lacked the ability to process transfers involving Hong Kong dollars and Swiss francs.
While the exchange said it was able to make some transfers involving these fiat currencies, the financial institutions later informed Bitfinex it would no longer be able to make transfers using these currencies.
These difficulties come days after Bitfinex announced on 13th April that its USD withdrawals were suffering delays. On 17th April, it further said its Taiwan-based banking providers were refusing incoming wire transfers.
At the time, the exchange emphasized that it was working on "alternative solutions" that would allow its customers to make deposits and withdrawals using fiat currencies.
Still, while this has stoked worries about a Mt Gox-style insolvency, the exchange vehemently denied these allegations today.
It's worth noting, too, that Bitfinex has a history of bouncing back from issues as well, as it recently finished paying back users for a $65m hack experienced early last August.
While it remains to be seen how the situation will unfold, with BTC-e and OKCoin joining Bitfinex in announcing banking issues, the developments have sparked some fears of wider crackdowns on exchanges.
BTC-e representatives told CoinDesk its issue had to do with a third-party payment service, Mayzus, one it reported happens multiple times a year.
As such, it's possible the uptick in issues is merely reflective of the tough environment bitcoin businesses have always faced when seeking to secure banking partnerships.
Suspension bridge image via Shutterstock
PlexCoin Founder Gets Jail Time, Fine on Contempt Charge
U.S. and Canadian authorities appear determined to make an example of a recent initial coin offering.
On Friday, a Canadian court ordered a two-month jail sentence against PlexCoin creator Dominic
'Bitcoin Jesus' is 'really, really concerned' about the future of the digital currency
An early bitcoin investor said Monday the digital currency can run higher, but the hype has far outpaced its usability. "I think in the short run it can run up a lot more," Roger Ver, CEO of
Bitcoin has aspects of a bubble, but it's OK to 'play' with it: Economist Robert Shiller
Bitcoin has "aspects of a bubble" but it's almost impossible to know whether it's gone too far, Nobel-winning economist Robert Shiller told CNBC on Monday. Bitcoin has been on a wild ride
Futures Launch Puts Record Bitcoin Highs Back in Play – Yahoo Finance
Digital currency bitcoin begins trading on major exchange for first time in Chicago WLS-TVBitcoin Futures Started So Hot That Trading Had to Be Halted Twice FortuneBusiness Insider Â âCNNMoney Â â
Understanding Futures: A Primer for Bitcoiners
Lanre Sarumi is the CEO of Level Trading Field, an interactive online platform for professionals in the finance industry.
"Study the past if you would define the future." – Confucius
Bitcoin Price Back Above $17k to Set New All-Time High
The price of bitcoin has pushed back above $17,000, hitting a new all-time high on CoinDesk's Bitcoin Price Index (BPI).
As of press time, the BPI had climbed as high as $17,382.64, beating the $17
People are taking out mortgages to buy bitcoin, says securities regulator
Bitcoin is in the "mania" phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday. "We've seen mortgages being taken out to buy
Two Firms File Bitcoin ETF Applications in Wake of CBOE Futures Launch
Two exchange-traded fund (ETF) providers have filed with the U.S. Securities and Exchange Commission (SEC) to create Bitcoin ETF products that trade in cryptocurrency derivatives.
According to the