Ethereum Flash Crash - $317 to $0.1 on GDAX - Programmer explains

everythink (58) · 7 years ago (edited)

I don't like centralized exchanges at all because they always try to fool their customers in every possible way. Yesterday my transaction with $4000 worth of steem -> ethereum were lost by changelly.com probably due to poloniex problems.

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7 votes

wendigo (25) · 7 years ago

I keep hearing very bad things about Changelly. People getting some ridiculous fees, transactions not going through etc.

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dali.soh (50) · 7 years ago (edited)

I feel that these cryptocurrency exchanges need to follow the exchanges of the stock market. They didn't let it happen on the "normal" exchanges and they certainly shouldn't allow the flash crash to happen on cryptocurrency exchanges. We definitely need to set up circuit breakers if the cryptocurrency market becomes mainstream.

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https://streamable.com/fr6j8

noisy (67) · 7 years ago

actually I never heard about circuit breakers, however I never consider myself as a trader. IMO there is only one sure way to earn money thanks to cryptocurrencies, and that is not trading. Andreas Antonopolous explain what is that:

https://streamable.com/3omv2

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3 votes

ivanli (66) · 7 years ago

interesting, thanks!:)

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dodders007 (55) · 7 years ago

it's scary stuff this crypto, but are these exchanges any more scary than high street banks?

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alchemy20 (45) · 7 years ago

Coinbase are crooks Ivan !

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4 votes

nicnas (66) · 7 years ago (edited)

A few of my friends and I are going around coinbase now. Fees are too high. Its cheaper to use something like BitPay to withdraw now.

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krispee (44) · 7 years ago

this is really so worrying :/

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freedomvigilante (50) · 7 years ago (edited)

I don't think that circuit breakers should be set. People need to be self responsible for their investment. What happened yesterday was free market, if we start putting regulations then we will end up like the tradicional finantial markets controlled by a few making most of the money.

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yuriks2000 (66) · 7 years ago

Very informative video! Thank you @ivanli, now I understand what happened and why. Seems like an inside job to me. The plan was to buy 1 million of ETH for a very low price!

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heidelbaer (43) · 7 years ago

People confuse investing with daytrading.
When you buy a cryptocurrency and have it, nothing happens to it during a flash like this. Because you are an investor and intend to sell the coin in a distant future for huge profit.
When you do daytrading, you do not own any coins. You make bets that the coin will rise or fall soon.
And that is the morale of it. When you make bets, the rules of gambling apply to what you are doing. When you buy something, the rules of investing apply.
Nobody who had coins lost anything when the flash happened. Because there is no stop loss order for coins that one HAS. People can panic though and sell their coins when a flash like this occurs. They suddenly become gamblers because of their panic.
There is a nice saying in poker. When someone is steered by his emotions, overriding his rationality, experienced players on the table notice this and know: he is on tilt. They can then easily drain out all the money of him they please.

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rossjstanley (27) · 7 years ago

So as you describe it a stop loss is a dumb algorithm, that sells if the price drops below a threshold. My view is that in free market this type of activity is predictable, and therefore explotiatble. This means the fix should be market driven, i.e. investors have a feeling for the 'true worth' of ether so set up stop loss traps at low values to buy up any panics sells and buy cheap and prop up the price. Competetion between this type of investor should push up the trap level.

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alchemy20 (45) · 7 years ago

Why Ethereum Was $0.10
https://www.wealthdaily.com/articles/what-was-behind-the-ethereum-drop-flash-crash-gdax-ethereum-volatility-coinbase-protect-yourself-ethereum-investing/8746

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alchemy20 (45) · 7 years ago

39,300 Ether https://etherscan.io/tx/0xdfde8f3a24f92924ca9e046c15d9cc5e40e758df92ca12de56fac1c3469e071f

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sobuka (49) · 7 years ago

Margin is a b$%ch people. This space is not yet ready for margins (i.e. leverage). Very dangerous!!!! Crypto space is not yet mature for margins. Our exchanges are still fragile.

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senor (48) · 7 years ago

Let's see what all the fuss is about. Crazy stuff.

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nrajesh (50) · 7 years ago

Repasting the comment I left in youtube:

There are three things that attributed to this flash crash:

That massive order
Folks who have set stop loss price for such low values
Folks who decided to keep "more than what they can afford to loose" ETH in an online exchange.

Setting some sort of "circuit breaker" should be made a prerequisite, before any exchange can call themselves "The Most Trusted Digital Asset Exchange" in their homepage! Reg. the folks who bought ETH at 10 cents, I think that would be the traders close to the exchange or exchange employees themselves who would have been able to take advantage of this situation. External network access to this site would have nearly been cut-off!

A more thorough investigation is in order. And it should definitely be done by a third-party, not the exchange themselves!!

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steemanator (40) · 7 years ago

Damn was hoping for an article - any one kind enough to transcribe it ¿ on mobile don't have enough data to watch video.

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rarcntv (52) · 7 years ago

nice video and info. upvote and follow.

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raserrano (63) · 7 years ago

Hey thanks for this explanation! I really understood everything. Thanks for sharing

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furqanadillah (46) · 7 years ago

Thanks for share, this video very helpful

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fractalfreedom (45) · 7 years ago

Ivan on the story again! Thanks for keeping the reports coming. Enjoy the way you explore facts and raise arguments.

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http://www.newsbtc.com/2017/04/16/gdax-bitcoin-price-briefly-crashes-us0-06-system-maintenance/

hilmar (32) · 7 years ago (edited)

@ivanli, keep in mind that this has happened on GDAX before this April, when Bitcoin crashed to $0.06. Seems to me that there have some liquidity issues, otherwise the prices won't fall that fast...

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ionlysaymeep (50) · 7 years ago

meep

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lig007 (51) · 7 years ago

I think circuit breakers are a good idea.

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vincde (31) · 7 years ago

Good info. Keep up the good work. This is a problem with centralized exchanges.

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ogmagnum (34) · 7 years ago

So in theory could this work the opposite way? Could I put in an order that says if ethereum reaches 20 cents buy "x" number of shares? If so I can see this system being abused. Put in a lowball buy order wait for the next ICO to dump and pick up a ton of shares for next to nothing.

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melke (38) · 7 years ago

Thanks Ivan. I think the line between free market and customer protection is really fine. Exchanges have to be at the forefront to protect customers...especially from unpredictable, non-market-driven events

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izmini (42) · 7 years ago

Good sir, in past week i have been learning about cyrptocurrencies.

I came across your channel on youtube and subscribed to you.... and i almost never subscribe to anyone.... Very informative and intelligent!

Keep going brother!

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deaddy (50) · 7 years ago

I like your ELI5 videos. Please continue this.

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kozak (54) · 7 years ago

hold your ETH its going to bounce back soon, its nothing more then panic selling. soon as the panic sellers are out of the market and people calm down ETH will start climbing up again

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robbieretard (48) · 7 years ago (edited)

I am trading Ethereum on etoro and nothing happened there. I had a stop loss at $150 and it was not triggered.

I think etoro work on a time delay system for trading crypto to avoid flash crashes. Recently they removed leverage on all crypto as the swings in price were too much they said. Decentralised exchanges are on the way.

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botch (25) · 7 years ago

Can ethereum scale better than bitcoin?

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sobuka (49) · 7 years ago

Thanks for your insight ivanli on this issue. I exhausted a lot of time in this crazy Status Ico situation. Very annoying.

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schneidor (54) · 7 years ago

I feel sry for all those people. But proposing a regulation on a cryptocurrency is a very hot topic. One can argue that it isn't a regulation, as it is executed on the exchange. Nevertheless, if we start putting regulations on the cryptocurrency...how long do you this does it take until we get regulations from the different governments. I have no idea if we should start to introduce such regulations. I'm not experienced enough in the whole crypto world to judge this. But I think this event will have quite a huge impact.

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nicnas (66) · 7 years ago

This post received a 10.0% upvote from @NicNas thanks to @NicNas! For more information, click here!

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ivanli (66) · 7 years ago

❤️

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nicnas (66) · 7 years ago

I relied to this but it disappeared. ANyways i was playing around above. I really enjoy your videos, especially when i want to know more about something. I remember watching a lot of your videos when i first started. Thanks for the good knowledge.

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marcsoer (27) · 7 years ago

YOU ARE MISSING THE POINT! The first question to ask is why someone would sell so much so quickly? This is a direct effect of FIAT currency. What has happened here is someone borrowed money that they needed to pay back at a certain time, most likely at the end of the month. You could probably find a time were the same amount of volume bought ETH at the beginning of the month. This will most likely happen again and it could happen in any trading platform, with people converting FIAT currency into CRYPTO. I don't think it's a good idea for these trading platforms to implement things like circuit breakers because it will make the costs of trading go up. What people should do is place alerts on their phones and emails, they should stop using automated stop losses in these kind of environments. When you make a trade you should be the one making the decision, not allowing a computer to just react to one single perimeter, maybe more advanced stop losses could be created to place conditions on flash crash proofing, but the real solution here is that people should pull their crypto and place it into their wallets in a safe place.

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reliikki (40) · 7 years ago

Hei Ivan! thanks for your videos on youtube! I'm here on steem an early adoptor and all thanks to you. This video was great, and i personally think that regulation always brings problems so you have tu realize that part of speculating is the risks. Nothing bad happened and hopefully everyone learned a lesson. We are all children in this world and the best way to learn is from mistakes. We will learn but there will always be things we havent thinkd beforehand. We cannot control our enviroment and markets work how thei work. stoploss works just as i should but this can happen. Not long ago the Swiss Frank got unpegged to Euro end it was choas for a day, and then it got normal. Markets self correct but induviduals can lose money. Thanks for your videos, keep going! You are doing a great job!

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meisi51 (43) · 7 years ago

In my opinion you do the best content when it comes to crypto stuff. I like your informatics background - it shows that you know what you're talking about and that this isn't just some catchy "Buy Ethereum" stuff. Great work ! Following and upvoting you.

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machhour (61) · 7 years ago

great job , youssef from morocco follow you in youtube & steemit
i hope you follow me & feel free to check out my account
thanks a lot

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