Bitstamp Begins Investigation On the Crash of Bitcoin Price Due to Large Sell Order for BTC/USD
World’s largest cryptocurrency Bitcoin suffered a dip in price earlier today. The virtual currency lost its momentum and lost over $1500 under two hours, despite gaining over $2000 in a few days.
The downward slope in the price of Bitcoin also resulted in the liquidation of over $207 million worth of positions in BitMEX, a Bitcoin Mercantile Exchange.
What Really Happened
The sudden slip in the price of Bitcoin has got many tongues waggling in the cryptocurrency community, as experts try to outdo themselves in trying to explain what really went wrong. Meanwhile, some analysts are pointing accusing fingers at Bitstamp, forcing the exchange to release an official statement on the latest occurrence.
A cryptocurrency expert and co-founder of Primitive Ventures Dowey Wan expressed his opinion on his official twitter handle @DoveyWan. Wan stated that:
- This is what happened, a jackass put up an aggregated sell of 5000 $BTC on Stamp
- Stamp poor depth+ algo glitch?
- Bmx index is 50% on stamp
- Massive BMX liq tanked the mkt
- Despite all BTC quickly bounced back to $7000
- This might be the best chance to BTFMD’’
Coincidentally, BitMex price index is weighed using the price on the Bitstamp and Coinbase Pro. And since BitMEX’s 50% of price index was Bitstamp, this led to making long massive liquidation, which eventually led to the crash
Bitstamp also responded to the issue on its official Twitter account.
‘’1/2: A large sell order was executed on our BTC/USD pair today, strongly impacting the order book. Our system behaved as designed, processing and fulfilling the client’s order as it was received’’.
It went further by saying:
‘’2/2: We closely examine every event that causes large-scale movement in our order book and have started an immediate case investigation’’.
However, Bitstamp has assured that they are closely examining the event that led to the large -scale movement in its order book.
Back to Normal
After the initial fall, Bitcoin regained back its composure in another 15 minutes and was trading well above $7000 again. It eventually rose to $7,300 which is about 4% lower than it was immediately after the crash.
In related news, amid many topics discussed, concerning the overall security of bitcoin, some experts are of the opinion that it cannot be affected by a 51% attack.
Bitcoin Exchange Guide reported earlier in the month that the co-founder of ZeroBlock and Product Manager of Blockchain Dan Held expressed it optimism about the security of Bitcoin stating categorically that it shouldn’t be largely affected by a 51% attack.
The cryptocurrency expert explained that since Bitcoin is not controlled by a central authority and a single body that has the autonomous right over the coins, it will be really hard to be infiltrated. Held suggests that Satoshi’s intention when creating Bitcoin was to create a unique system in which human –making a decision could be removed from the process.
He explained further stating that the coin was created to grow in the long term and it’s focused on stability and transparency.