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Ethereum Flash Crash

What Caused The Ethereum Flash Crash?

What Caused The Ethereum Flash Crash?

No indication of wrongdoing, exchange says It was a rough day for traders of the worlds second-largest cryptocurrency on Wednesday as ethereum plunged from more than $317 to briefly trade as low as 10 cents in a flash cash on the GDAX exchange before rebounding. In a post, GDAX Vice President Adam White said a multimillion-dollar market sell order was placed on GDAXs ETH-USD [ethereum-U.S. dollar] order book, which resulted in orders being filled from $317.81 to $224.48for a slippage of 29.4%. That, in turn, began a cascade of around 800 stop-loss orders and margin-funding liquidations, which sent the price temporarily as low as a dime, he explained. A stop-loss order requires the security to be sold when the price hits a certain threshold. Margin-funding refers to trading with borrowed money. Liquidations can occur when margin-funded positions are closed out automatically to prevent further losses. The combination of stop-loss orders and margin liquidations contributed to the sharp downward spiral, which was followed by a sharp rebound. White said the GDAX decided to temporarily halt trading of ETH-USD in response to the price movement, then restored trading in accordance with the exchanges downtime process once it was confirmed that all systems were operating correctly. White said the exchanges initial investigations showed no indication of wrongdoing or account takeovers but acknowledged that such an event can be frustrating for our customers. White said the exchanges matching engine operated as intended throughout this event and that trading with advanced features like margin always carries inherent risk. And dont look for the trades to be reversed. We are continuing to conduct a thorough investigation and will keep customers updated with any resulting actions. Wit Continue reading >>

Ethereum Flash Crashesdontpanic

Ethereum Flash Crashesdontpanic

TL;DR The Ethereum network was saturated with transactions from a particularly challenging ICO exchanges had insufficient controls to slow a flash crash, and were isolated from rebalancing one another via arbitrage a big ether holder in one exchange put in a huge sell order at-market that caused the price to drop precipitously on that exchange only since then, normality has been achieved there are a lot of reasons to believe the ecosystem will be able to deal with this type of situation better in the coming years. The book from whence the phrase entered thelexicon. If you hold much ether, or maybe if your friends do, you will spend some time wondering why the heck its so volatile. About once a month you will wake up in the morning and hear Eth is crashing from your friends and/or Google News. The sky will darken. Your cat will give you a look that says, I knew you would run out of tuna. Im going to assume you are like me you know something about ethereum, and you are just dang interested in what the heck is going on. You saw the news headlines concerning ethereum on June 21, and you want to understand what happened and what this means going forward. The first thing you might do, upon hearing news of an ethereum crash, is pop over to reddit.com/r/ethereum , and see if there is an explanation. On June 21, a bunch of stories read something like: Ethereum Network is so Congested Exchanges Are Forced to Disable ETH Wallets The explanation of the price dip you might get from that article is that its all market-psychology holders of ether heard that there were delayed transactions on the network (because there were more transactions than the network can handle saturation all other transactions had to wait in queue). Some exchanges decided to halt trades (probably a good idea) Continue reading >>

India Flash Crash: Bitcoin [btc] To $5700 And Ethereum At $459 Post Zebpays Notice To Users

India Flash Crash: Bitcoin [btc] To $5700 And Ethereum At $459 Post Zebpays Notice To Users

India Flash Crash: Bitcoin [BTC] to $5700 and Ethereum at $459 post Zebpays notice to users India Flash Crash: Bitcoin [BTC] to $5700 and Ethereum at $459 post Zebpays notice to users Zebpays recent notice to Indian users, titled, Prohibition on dealing in Virtual Currencies warned that Zebpay will not be able to process the INR withdrawals or deposits if it does not have a supporting bank. Within hours of this announcement, everything from Bitcoin, Ethereum, Ripple and other assets crashed by more than 10% in some cases. As per the notice by RBI, the financial banking sectors under the purview of the RBI are to comply with the directive by July 5th. The next hearing for the same is said to be scheduled for July 20th. The current panic-selling is what the Indian crypto community called temporary and they expect a pull-back pretty soon. The price of some cryptocurrencies on Unocoin at press time AMBCrypto spoke to Vishwanath Shastry, UnocoinsVP, he was optimistic about the future but said that the current reality is that banks will have to comply with the RBI order by July 5th. He says, The panic selling right now is because of such notifications. They are just forewarning users to withdraw the current INR. The RBI directive had given 90 days time to pull out support. This 90 days will end after 2 weeks. All exchanges will get affected. But its horrible that certain users are selling at a heavy loss. India will be tamed by cryptocurrency soon. This is a fact. Its just a matter of when. Rahul Diwedi, a cryptocurrency investor from Bangalore says, Banks like Kotak, Axis have already sent out emails saying they withdraw support from any cryptocurrency related transactions. Im ashamed to live in such a country which are not open to development and progress. They are in turn Continue reading >>

Ethereum Flash Crash: Coinbase Reimburses Traders | Fortune

Ethereum Flash Crash: Coinbase Reimburses Traders | Fortune

When a trader sold a large position in the digital currency Ethereum last Wednesday, the sale triggered a so-called flash crash on the Coinbase-owned exchange GDAXcausing the price to tumble temporarily from around $320 to just 10 cents. The price quickly recovered, but not before some traders, who had set up automated sell orders in the event of a price decline, got walloped. Coinbase initially responded to the flash crash by saying tough luck to these traders, whose Ethereum had been sold off at fire sale prices to meet margin calls and so-called stop-loss orders. But late Friday, the company reversed its position. The VP of GDAX, Adam White, said in a blog post the exchange would make the flash crash losses: We will establish a process to credit customer accounts which experienced a margin call or stop loss order executed on the GDAX ETH-USD order book as a direct result of the rapid price movement at 12.30pm PT on June 21, 2017. This process will allow affected customers to restore the value of their ETH-USD account to the equivalent value of their ETH-USD account at the moment prior to the rapid price movement. White added that it would fund the customer credits with company money, and that it would not unwind the trades of those who had placed buy orders during the flash crash. This is terrific news for those who bought Ethereum during this periodit means some fortunate traders snapped up the digital currencywhich is trading at $305 as of Monday morningat a massive discount. Continue reading >>

Ethereum's Price Flash Crashes On Kraken Below $240

Ethereum's Price Flash Crashes On Kraken Below $240

Ethereums price briefly fell to $237 on Kraken, which usually handles about $20 million worth of eth/usd trading volumes within 24 hours. The flash crash occurred earlier today at about 4:59 AM London time with the reason for it remaining unclear as Kraken has not publicly said there was any glitch. It may well be, therefore, this was a big market order or perhaps a fat finger with about 18,000 eth sold and bought within 1 minute at precisely 4:59AM London time. That strongly suggests someone market sold about $5.2 million worth of eth, either intentionally or by accident, with price then returning to normal levels on increased volumes. That was just as Europe was about to wake up, with crypto prices usually moving significantly at around six in the morning London time. That would be around 2PM in China and in Asia more widely, indicating that it may have been a trader who perhaps misplaced a comma or accidentally added too many zeros. It does also more generally indicate some jitteriness following a nine months long bear market with these flash crashes usually a sign of the market over extending itself. Ethereum has been trying to overtake $300 in the past few days, but without much success to the point bitcoin traders are now complaining it is keeping their crypto down too, but btc rose slightly today while eth hasnt moved much. Ethereum has been sidewaying for about four weeks after falling pretty much straight down since May without any bounce or upwards correction. Many therefore are looking to see how its price action will develop as that period of sidewaying for the past few weeks might suggest some sort of bottom may be in sight, but how it will break out when it decides to move remains very much to be seen as the bear market seemingly continues. Continue reading >>

$13: Ether Prices Plunge In Gdax Exchange Flash Crash - Coindesk

$13: Ether Prices Plunge In Gdax Exchange Flash Crash - Coindesk

$13: Ether Prices Plunge in GDAX Exchange Flash Crash In yet another instance of just how volatile the cryptocurrency markets can be, the price of ether plummeted to $13 today on cryptocurrency exchange GDAX. The steep decline, observed at roughly 20:30 UTC, had an outsized effect on the market forthe digital token that powers the world's second-largest blockchain . Overall, the value of ether fell to this price after trading at as much as $365.79 earlier in the session, according to GDAX data. As a result, the flash crash represented a more than 96% decline from the daily high. The move was so severe thatCoinbase, the US-based operator of the exchange, opted to disable trading of the ETH/USD pair and block withdrawals of ether. Further, the price of ether suffered this loss amid signs that the ethereum network has been struggling to cope with the demands of its rising use. Data provided by Etherscan reveals that more than 300,000 ether transactions were broadcast on 20th June, an all-time high for the two-year-old network. As such, it remains unclear whether the decline and network congestion will be enough to stem enthusiasm, as until recently, many market observers were so bullish on the asset's potential they believed it was on track to bypass bitcoin as the market leader . At press time, ether was trading at roughly $300 across global exchanges. Disclaimer:CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase. Correction:An original version of this article miscalculated ether's decline. This has been corrected. Continue reading >>

U.s. Financial Watchdog Investigating Ethereum Price Flash Crash On Gdax: Report

U.s. Financial Watchdog Investigating Ethereum Price Flash Crash On Gdax: Report

U.S. Financial Watchdog Investigating Ethereum Price Flash Crash on GDAX: Report The U.S. Commodity Futures Trading Commission (CFTC) is investigating the June 21 ethereum price flash crash that occurred on GDAX. CFTC Investigating Ethereum Price Flash Crash As reported by Bloomberg , the CFTC has asked Coinbase the owner and operator of GDAX to supply information about the June 21 flash crash , which caused the ethereum price to plunge from $317.81 to 10 cents within milliseconds before recovering to its previous level. Bloomberg cites two unnamed sources familiar with the matter who say that the financial watchdog is interested in whether margin trading played a role in the incident. Through margin trading, large-scale traders can use borrowed funds to place high-risk bets on the future value of the asset, in this case, ether. The crash appears to have been triggered by $12.5 million trade that caused other traders to panic sell and automatic sell orders to initiate. Coinbase compensated traders who were impacted by the flash crash, and the company told Bloomberg it fully cooperates with regulators but was unaware of a formal investigation into the event. Regulators Focus Attention on Crypto Markets The CFTC investigation into the ethereum price flash crash on GDAX is yet another sign of the increased focus U.S. regulators are placing on the cryptocurrency markets. Last month, the CFTC filed a suit against Nicholas Gelfman and his investment fund, Gelfman Blueprint Inc., for allegedly operating a $600,000 Ponzi scheme. While Gelfman claimed to be using an advanced algorithm to trade bitcoin and other cryptocurrencies, he was actually using new investments to pay dividends to earlier investors. Moreover, former CFTC commissioner Bart Chilton recently penned an op-ed i Continue reading >>

Another Flash Crash: Bitcoin Down To $7200, Ethereum At $570, Ripple [xrp] At $0.63

Another Flash Crash: Bitcoin Down To $7200, Ethereum At $570, Ripple [xrp] At $0.63

Another Flash Crash: Bitcoin down to $7200, Ethereum at $570, Ripple [XRP] at $0.63 An undramatic Saturday night where Bitcoin was happily trading at $7600 turned into a bloodshed when BTC dropped by almost $400 in under 2 hours. Almost all other virtual currencies faced the same bear pressure dropping by ~5% in the past 24 hours. IOTA and BCH were the biggest losers, losing ~10% and 7% in value respectively over the past 24 hours. Bitcoin [BTC] at press time had gone back to trading at $7348 to a token with a market cap of $125 billion with current market domination at 38.3%. A lot of chart analysts had predicted a big price action on Saturday or Sunday with the Bollinger Band indicator showing an elongated tube formation which is generally interpreted to be followed up by a big price action. Ethereum [ETH] also crashed with the similar selling pressure as Bitcoin leaving the charts looking exactly similar. Ethereum [ETH] was trading above the $600 price point before the dramatic sell-off in under 2 hours which left ETH trading at $570 to a token with a market cap of $58 billion. Ripple [XRP] although experienced a similarselling pressure, immediately after the drop there was a pullback. XRP at press time was trading at $0.64 to a token with a market cap of $25 billion. Despite this slump, many analysts call this drop as insignificant because of the 24-hour trading volume as early January this year Bitcoin experienced a trading volume of $17 billion in a day. Yesterdays Bitcoin trading volume was 4x lesser at $4 billion. Thomas Lee , Fundstrats Robert and many other influencers including John McAfee have predicted the year-end prices to be more than $20K for Bitcoin. With the market prices still dependent on Bitcoin, a bullish momentum in Bitcoin will signal a monumen Continue reading >>

Ethereum Crash: Why Some Coinbase Traders Lost Big | Fortune

Ethereum Crash: Why Some Coinbase Traders Lost Big | Fortune

The white hot cryptocurrency Ethereum went on a wild ride on Wednesday, plummeting from around $320 to around 10 cents in a so-called flash crash. The price soon recovered but not before some investors took a terrible bath and some others made out like bandits. Ethereum, a popular new digital currency, trades on exchanges much like its older rival bitcoin. The most widely-used exchange, Coinbase-owned GDAX , operates like a traditional stock exchange, and lets traders buy stock on margin and place so-called stop loss ordersan automated instruction to sell if the price falls below a certain point. As Adam White, the VP of GDAX, explained in a blog post , one investor placed a multi-million dollar Ethereum sell order at 12:30 p.m. on Wednesday. The size of the order caused the price of the currency, which is already volatile, to dip. Things started to go really haywire, however, as the price dip triggered a series of stop loss orders. This slippage started a cascade of approximately 800 stop loss orders and margin funding liquidations, causing ETH to temporarily trade as low as $0.10, White explained. In other words, the computers executing the stop loss orders began to sell at all costs and, so long as there was someone on the other side to match the order, the trade went througheven if the price was totally irrational, and driven only by an algorithmic frenzy. Continue reading >>

The 45-millisecond Ether Flash Crash Prompts Safeguard Effort

The 45-millisecond Ether Flash Crash Prompts Safeguard Effort

The 45-Millisecond Ether Flash Crash Prompts Safeguard Effort Coinbases GDAX exchange is considering using circuit breakers GDAX might also introduce incentives to lure market makers Last weeks flash crash in the ethereum digital currency prompted the venue where it happened to consider safeguards used in other markets such as stocks. Circuit breakers that would pause trading to prevent accidents from spiraling out of control and a system of incentives to lure market makers whod help keep prices from dropping too far are among the options under consideration, according to Adam White, general manager of Coinbase has consulted with the New York Stock Exchange and other experts on how to prevent flash crashes, White said, though he declined to give details. NYSE Group The crash at 3:30 p.m. New York time on June 21 drove the currency down to 10 cents from $317.81. The cause, White said, was a single $12.5 million trade -- one of the biggest ever -- placed by a customer as a market order, or a request to sell immediately. That pushed ethereum to $224.48, but the pain didnt end there. The decline triggered sell orders from traders whod requested to bail on the currency if prices fell to certain levels, and prompted GDAX to liquidate some margin trades. It all happened in just 45 milliseconds, White said in an interview. Thats when computer algorithms started buying, driving prices back up to $300 within 10 seconds, he added. This was not long, sustained, panicked selling, White said. It was a very rapid, cascading event followed by aware and intelligent programmatic traders buying. Ether fell 4.8 percent to $288.50 on Friday afternoon, according to data compiled by Coindesk.com. Preventing the next digital currency flash crash might depend on learning lessons from the stock Continue reading >>

Coinbase Under Investigation For Ethereum Flash Crash

Coinbase Under Investigation For Ethereum Flash Crash

Coinbase Under Investigation for Ethereum Flash Crash The Commodity Futures Trading Commission is investigating Coinbase for an Ethereum flash crash that occurred in June. During the crash, the ETH exchange rate plummeted down in an instant, but quickly regained its price. According to Bloomberg , Ethereum dropped from trading at$317.81, down to 10 cents in a split second. However, its recovery was also swift. It regained a $300 price point in mere seconds. Also read: Switzerlands FINMA Eyes Crypto Valley The Bloomberg article said, The Commodity Futures Trading Commission has requested information from Coinbase Inc. about a June 21 incident on its GDAX platform in which the Ether digital token suffered a precipitous drop, falling to 10 cents from $317.81 in milliseconds before quickly recovering, said two people familiar with the matter. Could Margin Trading have caused the Plunge? The CFTC is concerned that leveraged or margin trading may have precipitated the flash crash. Margin trading allows users to borrow money to trade. This is called trading on margin or leveraged trading. Among the issues the agency is focused on is what role leverage might have played in the plunge, asCoinbaseallowed traders to use borrowed money to make bigger wagers than would have otherwise been possible, said the people, who asked not to be named because the review isnt public. After the flash crash, Coinbase discontinued their margin trading service. Their actions quickly piqued regulatory interest and scrutiny. The Cryptocurrency Wild West and Coinbase Cooperation Regulators are now scrutinizing cryptocurrency exchanges even more. It comes as no surprise that the CFTC is thoroughly investigating Coinbase because the CFTC wants to control the wild west nature of the digital currency eco Continue reading >>

This Ethereum Flash Crash Shows How Cryptocurrency Markets Are Super Risky

This Ethereum Flash Crash Shows How Cryptocurrency Markets Are Super Risky

This Ethereum flash crash shows how cryptocurrency markets are super risky Ethereum is rebounding, but not after a dramatic crash. The cryptocurrency market for Ethereum plummeted late Wednesday. This wasn't a quick dip, but a flash crash that sent the price from $317 to a low of $0.10 in a matter of seconds. Some people saw thousands of dollars in value disappear. Things are back to normal, sort of. The price of ether, the cryptocurrency of the suddenly hot Ethereum platform, has since rebounded and is trading back at about $318. The crash, however, remains as a big reminder that this is a volatile, new market. Plenty of people have made small fortunes investing in these markets, but the get-rich-quick stories belie the risks that the average person faces if they want to get in on these new digital currencies. The vice president of GDAX, the Ethereum exchange which experienced the crash, blogged about the event , explaining that a "multimillion dollar market sell" was placed midday Wednesday. This triggered prices to fall from about $317 to $224 and 800 automatic stop loss orders to go throughthose are automatic sells set for when prices hit a certain amount. Hence some people who didn't even mean to sell ended up dumping their ether for a small percentage of what it had just been worth. "We understand this event can be frustrating for our customers," VP Adam White wrote. Things went down fast. The trading price of ether dropped 99 percent in a second, but then rose back up, with traders who held onto their holdings coming out just fine. I'm not worried, but this #ethereum chart is definitely 1 for the history books. 1 day you're kids will be studying it in their #Crypto101 ! pic.twitter.com/jU2lO6Fzwz Learn Cryptocurrency (@investor_crypto) June 22, 2017 How many of Continue reading >>

Throwback To That Time Ether Flash-crashed On Gdax To $0.10 : Cryptocurrency

Throwback To That Time Ether Flash-crashed On Gdax To $0.10 : Cryptocurrency

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What Caused Ethereums Flash Crash?

What Caused Ethereums Flash Crash?

Its been a rough week for Ethereums cryptocurrency, Ether. As recently as Wednesday, the token was trading atmore than $280/ETH, but it has since slipped significantly, and in the past 24 hours has even dipped below the $200/ETH barrier. Bitcoins price has dipped too, but not nearly as sharply, and ETHs value has fallen from about 25 ETH/BTC a few days ago to more than 30 ETH/BTC as of this writing. So why the sudden drop? Nobody can say for sure, but here are some of the prevailing theories: Negative sentiment. Few public figures have more influence on the perception of Ethereum than its highest profile creator, Vitalik Buterin. So it may not be a coincidence that just prior to today's sharp drop, Buterin was quoted in Bloomberg as saying that cryptocurrencies are nearing their ceiling. There isnt an opportunity for yet another 1,000-times growth in anything in the space anymore, he said, adding that the strategy of marketing cryptos to boost attention and attract investors is getting close to hitting a dead end. Buterin also recently wrote on Reddit that a TechCrunch article about ETHs price trending toward zero would be correct if Ethereum continued as it exists today. He did stress, however, that he doesnt actually think ETH will hit zero because the technology will change in ways that address the TechCrunch authors criticisms. ICO sell-offs. Many initial coin offerings raised funds largely or wholly in ETH, and major drops in price may be sparked in part by large sell-offs as ICOs cash in on their ETH holdings. Dappcaputulation , a site that tracks the ETH holdings of some major ICOs, shows that blockchain content startup Decent has sold 20,000 ETH (roughly $4 million at current prices) in the past 24 hours, and its quite possible that other ICOs followed suit as Continue reading >>

Ethereum Price Crashed From $319 To 10 Cents On Gdax After Huge Trade

Ethereum Price Crashed From $319 To 10 Cents On Gdax After Huge Trade

The price of ethereum crashed as low as 10 cents from around $319 in about a second on the GDAX cryptocurrency exchange on Wednesday, a move that is being blamed on a "multimillion dollar market sell" order. Ethereum is an alternative digital currency to bitcoin and had been trading as high as $352 on Wednesday. It has since rebounded from its flash-crash lows to trade to about $325 on the GDAX exchange. According to industry and price tracking website Coinmarketcap, which takes into account the price on several exchanges, ethereum was trading around $338. Adam White, the vice president of GDAX which is run by U.S. firm Coinbase, posted on the exchange's blog, outlining what took place at around 12:30 p.m. PT on Wednesday. According to White, the multimillion dollar market sell order resulted in a number of orders being filled from $317.81 to $224.48. As the price continued to fall, another 800 stop loss orders and margin funding liquidations caused ethereum to trade as low as 10 cents. A stop loss order is a trade that is executed automatically once a security in this case ethereum hits a particular price. Margin funding is essentially trading with borrowed funds. Liquidation is when these positions are closed automatically in order to prevent further losses. The knock-on selling effect caused the flash crash on GDAX . The chart below is a screenshot of the GDAX price showing the high and low price. Many on social media criticized GDAX and alleged there was some sort of illegal activity taking place. GDAX denied this. "Our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margi Continue reading >>

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