Surprisingly, the insurance fund of BitMEX has seen slower growth in March, than it did in the previous months – about 100 BTC. The increase in February, January, and December was 1250 BTC, 459 BTC and 484 BTC respectively.
BitMEX was severely criticized during the drop of 12-13th March, which caused the exchange to shut down for about 30 minutes. The exchange defended itself by pointing out that the insurance funds are assigned only to avoid Auto-Deleveraging for profitable traders, not for reimbursing losses.
BitMEX Insurance Fund Details
Notice how the insurance fund fluctuated on the 12th and 13th March. It dropped drastically on 12th and increased by higher proportions the following day. Moreover, it witnessed a gradual decline after that as the volatility in prices remained high. Suggesting that volatility and liquidations are not always profitable for the exchange.
According to datamish, about $2.6 billion in longs and $571 million in shorts have been liquidated in the last 30 days.
BitMEX Explains How the Insurance Fund is Built or Depleted
Nevertheless, questions still remain around the scale of the insurance funds which is quite large. Even during such catastrophic drops, the fund has managed to increase, even if slightly.
Liquidity is King
After another incident that prompted criticism of BitMEX last month was during the market slippage on XRP contracts. At the time, BitMEX explained that these are unavoidable situations, and are characteristic of such markets.
While some took the opportunity to market their price engine compared to BitMEX, there is sufficient evidence of slippage on other exchanges as well. Crypto trader XC tweeted,
Show me some data on slippages please.