Recently, HSBC bank closed the banking facilities of Bitfinex. Little did anyone know that this seemingly small step will result in a premium of 2% for Bitcoin (BTC) bought through Bitfinex. Ever since the withdrawal of the banking facilities, the exchange has been asking its users to use USDT in order to buy and sell Bitcoin (BTC).
Bitcoin (BTC) premium rose through the week:
Even though, there is not much clarity as to why HSBC banned the banking facilities which are provided to Bitfinex but in the past 24 hours, the premium rose to 2%. This, in turn, has provided arbitrage opportunity for many traders as well. It remains to be seen whether the arbitrage opportunity will add to the premium or whether the premium will remain. On the other hand, another interesting point to note is whether the other cryptocurrencies which are being sold on Bitfinex will be sold at premium as well or not. If indeed, the other cryptocurrencies develop a premium as well, there will always be a possibility for arbitrage. Ethereum (ETH) already has a bit of premium but not as much as Bitcoin (BTC).
Even though, most of the users trade in cryptocurrencies with the help of Fiat currency but none of the exchanges or the users anticipated that withdrawal of banking facility by HSBC bank will actually propel Bitcoin (BTC) 2% percent premium on the cryptocurrency exchange. This clearly indicates that cryptocurrencies are not as isolated from the Fiat currencies as expected. In fact, they are closely linked due to which, any fluctuation in the Fiat currency or the demand-supply of the Fiat currency can actually result in a premium for the cryptocurrencies as well. Only time will tell whether in the future as well, this will impact the cryptocurrency prices or whether this is temporary.
For now, however, it seems like an interesting anecdote as a move by HSBC bank resulted in a 2% premium in Bitcoin (BTC) rises on a cryptocurrency exchange.