Ethereum crashed from $319 to 10 cents in seconds on one exchange after 'multimillion dollar' trade
My (rudimentary) understanding is that Ethereum is a new cryptocurrency, which has gotten attention from mainstream firms like JPMorgan Chase and Royal Bank of Scotland for its ability to embed some kind of automatic contracts via algorithms embedded in the transactions. Thus it can do more than just transfer cryptocurrency from one owner to another.
Unlike the ETF flash crash of 2015, in which transactions that took place during the crash were reversed,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.
Stories of serious loss due to the ETF Flash Crash of 2015 are close to nonexistent--has anyone seen any? On the other hand, it seems that real people really lost, and possibly made money as a result of the crash.White also noted that these trades are final and will not be reversed.
I don't worry much about the ETF flash crash of 2015--I don't use ETFs but that's because of convenience and personal taste, not fear of the flash crash. If I were into cryptocurrency I wouldn't worry too much about this, either--except for the statement that "these trades are final and will not be reversed."On the social forum Reddit, users complained of losing large sums of money from $3,000 to $9,000.
But it also seemed to be a large money making event for some too. On the trading forum StockTwits, user John DeMasie posted a screenshot of trade history around the time of the flash crash. It showed one person had an order in for just over 3,800 ethereum if the price fell to 10 cents on the GDAX exchange. Theoretically this person would have spent $380 to buy these coins, and when the price shot up above $300 again, the trader would be sitting on over $1 million. CNBC has been unable to verify the screenshot posted by DeMasie.