Ethereum crashed to a price of around 10 cents after trading in the low $300 range seconds earlier. The crash occurred on the GDAX cryptocurrency exchange at around 3:30 ET Wednesday.
There has been a flurry of accusations ranging from claims of market manipulation to assertions of weak price controls within GDAX. However, in a blog post Adam White, the vice president of GDAX said he has no reason to believe the crash was caused by nefarious activities.
Instead, White blamed a "multimillion dollar market sell" which filled a number of different orders as low as $230. According to CNBC "As the price continued to fall, another 800 stop loss orders and margin funding liquidations caused ethereum to trade as low as 10 cents."
And while many seemed to lose money
It also seemed to be a large money making event for some too. On the trading forum StockTwits, user John DeMasie posted a screenshot of trade history around the time of the flash crash. It showed one person had an order in for just over 3,800 ethereum if the price fell to 10 cents on the GDAX exchange. Theoretically this person would have spent $380 to buy these coins, and when the price shot up above $300 again, the trader would be sitting on over $1 million. CNBC has been unable to verify the screenshot posted by DeMasie.
What do you guys think? What does this say about the future of cryptocurrency trading?
Yikes. I was watching Ripple at $.31/USD a few days ago and now it's around $.026/USD.
Scary there isn't enough demand to fill big orders that it causes a chain reaction.
It doesn't say anything about the future of cryptocurrency trading. Just expect the SEC to start regulating heavily. However, it says something about the idiots trading ETH on margin. Sketchy exchanges, high volatility in crypto, near non-existent regulation -- why in the world would you be using margin?
Regulation may be a good thing for the future of cryptocurrency... If people gain confidence with the safety of regulation, it may drive up the volume.
Glad that I always leave limit orders on levels where I want to defend. I bot some ETH on that flash crash and made a tiny fortune.
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