Gate.io saw its daily trading volume rise to $4 billion on the evening of December 4th. This is many times larger than the trading volume of the Asian Bitcoin exchange on a typical day. A company spokesperson said that market fluctuations that evening caused problems with the trading strategies of “some quant institution users.”
Bitcoin exchange: The problem is caused by customers’ trading strategies!
For the second time this week, an Asian Bitcoin exchange has been forced to explain an abnormal increase in trading volume. Gate.io saw its daily trading volume rise to $4 billion on the evening of December 4th. This figure is many times larger than the trading volume of the Asian crypto exchange on a normal day. This surge has already caused a controversy with the community behind a so-called “animal token” called RATS, created on the Bitcoin Blockchain using the BRC-20 protocol. The project publicly accused Gate of fraudulent transactions yesterday. In addition, project participants called for a boycott of the stock market. Gate attributes this strange volume to market fluctuations that disrupted some of its clients’ trading strategies. In this context, the stock exchange made the following statement:
We have confirmed that this was a result of significant market fluctuations that evening which caused issues with the trading strategies of some institutional users. Changes in institutional users’ strategies during market fluctuations are common and do not affect the overall functionality of our platform.
The rise of HashKey
The news came in the same week that daily volumes on HashKey Exchange, a one-month-old exchange licensed in Hong Kong, rose to $4.5 billion. This is much more than the normal levels in the venue. HashKey attributed this increase to its campaigns promoting trading incentives that take the form of HSK tokens. There is currently no allegation that the two events are linked.
Introduced by developer Casey Rodarmor in early 2023, the Ordinals protocol paved the way for the emergence of Bitcoin-based BRC-20 tokens such as RATS and Non-Fungible Tokens (NFTs). Such assets have been a focus for Gate. The exchange recently listed a BRC-20 meme-coin called SATS. It also describes itself as a leader in BRC-20 assets. A Gate spokesperson said the following regarding the issue:
Regarding the RATS business and ecosystem, we want to ensure that Gate.io is committed to continuously providing maximum support for RATS and its community. As RATS’ leading trading platform, we contributed to 90% of trading volume. Additionally, we currently manage 22% of total asset volume.
Bitcoin-based BRC-20 tokens exploded
They also pointed to evidence of a reserve snapshot published on December 5 that Gate appears to have produced itself for BRC-20 projects traded on its platform. The report shows that reserve rates for ORDI, SATS, RATS and other related tokens exceed 100%. Meanwhile, ORDI, another Bitcoin-based BRC-20 token, rose 35% yesterday. As you follow from Kriptokoin.com, this was supported by the revival of Bitcoin, which surpassed $44,000.
Gate.io volume rose on December 5. Source: BitDegree
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