Following on what was written earlier about Bitstamp, prices of bitcoins are soaring on Bitfinex as the exchange appears to have pulled the plug on Bitstamp liquidity. Offering leveraged bitcoin trading, Bitfinex is one of the few trading platforms to successfully stream liquidity from other exchanges while also maintaining an internal order book. Due to offering execution on Bitstamp, pricing on Bitfinex is closely aligned to the bid/ask spreads on Bitstamp.
Currently though, spreads between the two exchanges have widened dramatically as Bitfinex has halted streaming of Bistamp prices. For reference, at 14:00 BST, bitcoins on Bitfinex are trading at around $555, versus $510 on Bitstamp, or $480 on BTC-e. The halting of Bitstamp pricing isn’t unusual, as it occurs during any period Bitstamp’s API has disruptions. However, the spike in prices elevate contrasts to prices usually staying around those of Bitstamp.
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It’s worth noting that for litecoin trading, Bitfinex currently does operate liquidity internally, without the use of third party pricing. As such, moving to a completely internal order book for bitcoins wouldn’t be out of the blue for them. Overall, it will be interesting to see how volumes hold on the exchange without the existence of Bitstamp’s liquidity, and whether they can maintain their current market share which is about 5-10% of the market.