It doesn’t happen often bitcoin exchanges cause a massive price glitch. For some reason, the GDAX exchange briefly listed bitcoin at US$0.06 per BTC. This event occurred right after the exchange came back from scheduled maintenance. Luckily, this price drop did not affect global bitcoin trading all that much. During times like these, it is good such a problem occurs on a smaller exchange.
Cheap Bitcoins At GDAX
A lot of traders were surprised last night when looking at the GDAX bitcoin price chart. During a brief moment, the BTC/USD price dropped by 99.9%. Keeping in mind how this trade revolved around 100 BTC in volume, there was a brief panic among traders. As a result, bitcoin was valued at US$0.06 before returning to its normal price. A rather interesting event, to say the least.
Order of operations of the Flash Crash Caused By @GDAX $btcusd $ltcusd pic.twitter.com/uB2UQz1dw7
— I am Nomad (@IamNomad) April 16, 2017
It is worth noting GDAX had undergone scheduled maintenance just prior to this incident. However, rather than waiting for order books to be depopulated, market executions were resumed immediately after. That allows for traders to buy and sell bitcoin at unprecedented rates. In this case, those who scooped up bitcoin at US$0.06 will be more than pleased. None of the other bitcoin exchanges emulated this price behavior, though.
One thing to keep in mind is how this drop affects the weighted bitcoin average. A lot of websites use GDAX to compute futures index prices. Such a drop to US$0.06 messes up the index quite a bit, to say the least. As a result of the drop, the bitcoin price index briefly dipped to US$888.48. Unfortunately for BitMEX users, some positions have been liquidated in the process. The exchange will refund all affected users, though.
It is evident glitches like these can occur at any given time. It remains unclear why GDAX did not repopulate the order book before resuming trading, though. It is possible this is just a one-off event, although it is worth keeping an eye on moving forward. Futures exchanges using average prices for their index will be affected by these incidents if they ever occur again. Moreover, if this problem repeats itself, the bitcoin price may effectively go down as a result.
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