Withdrawal issues plaguing Bitfinex have been blamed for the recent Litecoin spike. Cryptocurrency traders and posts on Reddit propose that customers posting about Litecoin withdrawals successfully processing has inspired a rush of Bitfinex’s customers to convert their holdings into LTC.
The spike in Litecoin hit above $100 USD on December 8. Litecoin posted gains of over 60% in two days as it had started with an opening price of around $93.60 USD, set a new all-time high at around $160 USD, then closed at around $148.75 USD. Since then, LTC markets have retraced to test the $140 USD area as many traders speculate on the sustainability of Litecoin.
There are some traders who believe that Bitfinex’s current difficulties with withdrawals have something to do with the shooting up of LTC’s price. Last week, the subreddit of Bitfinex has been flooded with posts from concerned customers who were complaining about incomplete withdrawal requests after several waiting days. Many of the users on Reddit have said that Litecoin had processed their withdrawal requests quickly, prompting Bitfinex customers to convert holdings into Litecoin as they hope that doing so would let them withdraw their funds.
“If you want withdraw convert all in Litecoin”
On December 10, a post was made on Reddit saying “I was two days trying to withdraw btc and iota and eth without lucky, then i read some user write convert all in ltc. So i did it and withdraw ~30ltc in 10 minutes!!” The post also linked photos of their screen as proof of their withdrawal. The comments section showed that many were clients of Bitfinex who moved and converted holdings into Litecoin, attesting to the post saying the service worked for them.
On Reddit, Bitfinex claimed that withdrawal delays are a consequence of a continuous malicious attack which spammed the exchange with a large amount of small withdrawal and deposit transactions. They had also posted on Twitter, saying they will not be processing cryptocurrency withdrawals less than $250 USD until a request mechanism is placed in 1 to 2 weeks.