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Investigating the Flash Crash
Exchange Investigates Flash Crash, Sending Bitcoin Tumbling to $8,900. BitMEX, a major crypto exchange, is probing unusual trading activity that caused a flash crash in Bitcoin, plummeting to $8,900 against Tether’s USDT stablecoin on its platform.
Unraveling the Crash
The incident occurred late Monday, contrasting with Bitcoin’s market price of over $66,000 on other platforms. However, Bitcoin swiftly rebounded and has since traded in line with the broader market.
Assurance of Safety
BitMEX assured its users that its systems functioned normally during the crash, emphasizing the safety of all user funds. The company identified “aggressive selling behavior” by a few accounts as the cause.
Investigating Misconduct
BitMEX is investigating potential trader misconduct related to the Bitcoin-USDT Spot market. The exchange clarified that it does not use internal market makers and that the sell orders were too substantial for independent market makers to respond to effectively.
Minimal Impact on Derivatives
Fortunately, the flash crash had no impact on BitMEX’s derivatives markets, and no liquidations occurred as a result. Deposits and withdrawals are being processed without any disruption.
Suspected Transaction Details
An account named @syq first reported the abrupt selloff, suggesting it may have been triggered by the sale of 977 Bitcoin, valued at approximately $66 million. BitMEX declined to comment further on the specifics of the transaction.
Bitcoin’s Price Movement
Following the flash crash, Bitcoin’s value has declined by around 14% from its recent highs. This dip comes after a surge in demand fueled by the launch of several spot ETFs in the US earlier this year, propelling Bitcoin’s 2024 gains to nearly 50%.
Impact of GBTC Outflow
Bitcoin experienced a further drop on Tuesday, falling to $62,458, as the Grayscale Bitcoin Trust (GBTC) saw a massive outflow of $643 million, the largest since it became an ETF on Jan. 11.
