Bitcoin Still Runs on 'Hard Mode', Warns Former SFOX Executive
Daniel Hinton, a former SFOX executive, believes Bitcoin still operates in 'hard mode', citing the largely disappeared exchange dislocations of 2018. He points to the recent BitMEX wind-down as an example of how thin liquidity can cause extreme price swings.
Hinton notes that in 2018, exchanges often had multi-percentage-point disconnections, which have largely vanished today. However, the BitMEX shut-down still led to a perpetual futures market wick above $150,000 on thin liquidity.
According to Hinton, custody remains underdeveloped for institutional investors, making it difficult for them to participate in the Bitcoin market. To address this issue, he suggests building infrastructure such as a UTXO price oracle and open-source price software that can run next to nodes.