Coinbase is reimbursing losses caused by the Ethereum flash crash

in bitcoin •  7 years ago 

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Earlier this week, GDAX, the digital currency exchange run by Coinbase, experienced a flash crash in its USD – Ethereum market.

Within seconds the price of ETH crashed from ~$320 to as low as $0.10. While the price recovered quickly, the rapid price movement caused many traders to experience margin calls or stop loss orders, resulting in potentially severe losses.

While many initially thought the flash crash was the result of nefarious work, GDAX eventually confirmed that there was no indication of wrongdoing or account takeover.

Instead, the flash crash was the result of someone placing a multi-million-dollar sell order at market price, meaning ETH would change hands at whatever price bidders were currently offering until the entire order was filled – no matter how much lower the price was than the current price of ETH.

Filling this order caused ETH prices to instantly slip 30% to $224 – which in turn caused 800 stop loss orders and margin liquidations, which further drove the price down, to as low at $0.10.

Typically, someone placing a large sell order would liquidate their position over time to minimize the downward effect on price. Also, GDAX reminds users who are about to initiate large sell orders that it will cause slippage in the market, meaning this trader most likely didn’t care (or didn’t understand) that his trade would move the market.

Read the full article here > original source: https://techcrunch.com/2017/06/24/coinbase-is-reimbursing-losses-caused-by-the-ethereum-flash-crash/?ncid=rss&utm_source=tcfbpage&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&sr_share=facebook

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Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
http://itandus.com/2017/06/coinbase-is-reimbursing-losses-caused-by-the-ethereum-flash-crash/

They indeed took the article as is from TechCrunch but it's good at least they've hyperlinked the source :)

Followed. Keep the updates coming. This crash put me off from trading crytpocurrencies

Thanks @kuwala313 this crash was an opportunity to purchase Ether as much as possible at the time of plummet, but who knew this would happen. But hey, diversify your investments so you don't risk losing it all.

Thanks for the tip. Currently mining Ether with GM. Am working on a diversified portfolio. Should have a portfolio in a couple of weeks

good luck mate!

its all good. keep the faith. the trend is intact

Good to be on the crypto boat, hope everyone realizes their goals in the soon future.

  ·  7 years ago (edited)

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