Bitcoin Flash Crash Causes $200m Liquidation on BitMEX
- BTC prices suddenly dropped overnight by 15%, after another NY court order related to Bitfinex and Tether
Just as the mood across cryptocurrency markets was striking an upbeat tone, a sharp turnaround last night flipped a switch. A flash crash in the price of Bitcoin allegedly starting with a big sell order transacted via the Bitstamp exchange crashed any positive sentiment that had built up before.
The most-popular cryptocurrency shed over $1000 in 15 minutes from $7,700 to around $6,600 before stabilizing just above $7,000 as of writing. The news comes amid increasing pressure on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term markets following the entanglement of Bitfinex and its sister company Tether into an investigation by the NY Attorney General.
Bitcoin flash crash price action, Source: TradingView, Coinbase feed
Flash Crash Market Making Challenge
The selloff started at Bitstamp with over 5,000 bitcoin being exchanged between 03:45 and 04:15 London time. The lowest print on the exchange was at $6,178. Speculation that the main reason for the crash of prices on Bitstamp is the 50% share of the price formation on BitMEX.
The high leverage used by traders on BitMEX is prompting sharp market moves that are wiping out holders of derivatives contracts purchased using leverage as high as 1:100. While regulated retail brokers are less exposed, the events show that despite the development of the crypto market over the past several years, risks of sharp and unexpected moves remain ample.
Bitfinex and Tether Saga Continues
Last night The Supreme Court of New York ordered Tether to stop loaning money to Bitfinex. The embattled cryptocurrency trading venue has been experiencing financial difficulties after its partnership with a Panama-based firm called Crypto Capital went south.
Bitfinex has been attempting to get its finances on track, with the latest batch of news focused on launching its own Initial Exchange Offering (IEO) Initial Exchange Offering (IEO) An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer ( An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer ( Read this Term). Those plans, however, have been scrapped in light of the investigations against the firm.
Just as the mood across cryptocurrency markets was striking an upbeat tone, a sharp turnaround last night flipped a switch. A flash crash in the price of Bitcoin allegedly starting with a big sell order transacted via the Bitstamp exchange crashed any positive sentiment that had built up before.
The most-popular cryptocurrency shed over $1000 in 15 minutes from $7,700 to around $6,600 before stabilizing just above $7,000 as of writing. The news comes amid increasing pressure on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term markets following the entanglement of Bitfinex and its sister company Tether into an investigation by the NY Attorney General.
Bitcoin flash crash price action, Source: TradingView, Coinbase feed
Flash Crash Market Making Challenge
The selloff started at Bitstamp with over 5,000 bitcoin being exchanged between 03:45 and 04:15 London time. The lowest print on the exchange was at $6,178. Speculation that the main reason for the crash of prices on Bitstamp is the 50% share of the price formation on BitMEX.
The high leverage used by traders on BitMEX is prompting sharp market moves that are wiping out holders of derivatives contracts purchased using leverage as high as 1:100. While regulated retail brokers are less exposed, the events show that despite the development of the crypto market over the past several years, risks of sharp and unexpected moves remain ample.
Bitfinex and Tether Saga Continues
Last night The Supreme Court of New York ordered Tether to stop loaning money to Bitfinex. The embattled cryptocurrency trading venue has been experiencing financial difficulties after its partnership with a Panama-based firm called Crypto Capital went south.
Bitfinex has been attempting to get its finances on track, with the latest batch of news focused on launching its own Initial Exchange Offering (IEO) Initial Exchange Offering (IEO) An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer ( An Initial Exchange Offering, or IEO, is a method of fundraising in which a cryptocurrency company issues and sells tokens through a cryptocurrency exchange. Unlike Initial Coin Offerings (ICOs), an IEO is instead administered by a crypto exchange on behalf of the startup that is looking to raise funds with its newly issued tokens.As such, an investor must make an account on the exchange that is holding the token sale and send cryptocurrency into that account. Therefore, the Know-Your-Customer ( Read this Term). Those plans, however, have been scrapped in light of the investigations against the firm.