Bitcoin Endures Instantaneous Flash Crash on Major Price Index
Bitcoin endured a flash crash early Tuesday morning. In just a few minutes, bitcoin plummeted $600. However, it quickly regained its footing. The crash resembles the Ethereum flash crash that occurred back in June.
Also read: Vanuatu Becomes First Nation to Accept Bitcoin in Exchange for Citizenship
According to a CNBC article, bitcoin hit a high of $4,867 early on Monday.
Then it dropped to nearly $4,200 instantaneously. The article said, “The digital currency had hit a high of $4,867 early on Monday, according to industry website CoinDesk, its highest since September 2. But the same index showed that it dropped by over $600 to a low of $4,200 at roughly 9:00 a.m. London time.”
Shortly after the collapse, the price recovered immediately.
Price Index and Discrepancies
The strange thing about the crash is that it was not reflected on every exchange. It was like a ghost crash. The Coindesk price index — which includes Bitstamp, Coinbase, itBit, and OKCoin — documented the crash. However, there were discrepancies. Other price indexes do not show the crash.
The CNBC article mentioned Brave New Coin’s bitcoin liquid index did not register any crash. The individual indexes that Coindesk is made up of also did not show that an instantaneous crash occurred.
The CoinDesk bitcoin price index is made up of the average price from four exchanges: Bitstamp, Coinbase, itBit, and OKCoin. Other indexes like Brave New Coin’s bitcoin liquid index showed no flash crash. Nor did CryptoCompare.com.
Alleged Cause of the Crash
It is not clear why all of these indexes did not register the flash crash. There does not seem to be an issue with the Coindesk price index, but that is not confirmed at the time of writing.
Per various sources, the crash may have been the result of Russia mentioning they may ban or block websites that trade in Bitcoin. The deputy governor of Russia’s central bank, Sergei Shvetsov, criticized digital currencies around the time of the crash.
He said, “The mysterious price movements followed the Russian Central Bank’s decision to block access to websites of exchanges that offer cryptocurrencies. The bank’s first deputy governor, Sergei Shvetsov, called digital currencies “dubious” at a conference in Moscow.”
Past Ethereum Flash Crash
Regardless what caused the crash, it resembles a similar crash that happened
on Ethereum exchanges. Back in June, ethereum crashed from $317.81 to 10 cents. It quickly recovered just like the bitcoin crash. The crash was noted to have occurred on Coinbase, and margin trading may have been implicated as the cause. The crash is currently under investigation by the Commodity Futures Trading Commission.
No bitcoin exchange is currently under investigation as a result of the most recent flash crash.
What do you think about this flash crash? Did it actually happen? Was it a glitch? Did the Russians cause it? Share your thoughts in the comments section below!
Images courtesy of Shutterstock
Make sure you do not miss any important Bitcoin-related news! Follow our news feed any which way you prefer; via Twitter, Facebook, Telegram, RSS or email (scroll down to the bottom of this page to subscribe). We’ve got daily, weekly and quarterly summaries in newsletter form. Bitcoin never sleeps. Neither do we.
Related
Competing Stablecoins Can’t Topple Tether
Love, hate or fear it, there’s no avoiding tether (USDT). Its shadow looms over the cryptoconomy, supplying sanctuary in times… read more.
These Are 2019's Biggest Cryptocurrency Winners and Losers so Far
The second quarter of 2019 is coming to an end and for those who invested in cryptocurrencies this year, market… read more.
