Exchanges

Chivo Wallet changes BTC price feed to prevent arbitrage trading 

  • Chivo's Twitter account announced that wallet users will no longer see the reference price quoted for trades executed using the price freeze feature
  • Chivo explained that traders have used the price freeze feature to arbitrage on other cryptocurrency trading platforms
  • President Nayib Bukele tweeted that Chivo had recorded 24,076 remittance requests worth more than $3 million

The Salvadoran government has changed the wallet to prevent traders from using the app’s price freeze feature to make profits through arbitrage trading. 

Traders have used the price freeze feature for arbitrage trading

Chivo’s Twitter account announced that wallet users will no longer see the reference price quoted for trades executed using the price freeze feature which allows customers to keep the Bitcoin price quoted by the app for up to one minute. Chivo explained that traders have used the price freeze feature to arbitrage on other cryptocurrency trading platforms worldwide during significant price fluctuations in Bitcoin. 

The frozen prices feature allowed traders to take advantage of price gaps on other exchanges while quickly using the Lightning network to move assets. Chivo describes traders who use Chivo’s frozen prices to arbitrage against real-time exchanges as extracting potentially “endless” profits through “fraud”.To prevent more arbitrage trading Chivo plans to remove the price feature and offer real-time price references for costumers using its app.

Chivo Wallet recorded 24,076 remittance requests as of October

The legislation of Bitcoin in El Salvador appears to have encouraged widespread Bitcoin adoption Salvadorans now appear to be converting their US dollar savings into BTC at an increasingly rapid rate. President Nayib Bukele tweeted that Chivo had recorded 24,076 remittance requests worth more than $3 million as of October 14.

El Salvador also announced that it would invest a part of the $4 million from Chivo’s Bitcoin trust in the construction of a new animal hospital in the capital, San Salvador.  

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