- Bitcoin experienced a flash crash on BitMEX exchange, with prices plunging from over $60k to $8.9k before rapidly recovering to $67k. The crash was limited to BitMEX’s platform.
- The crash may have been triggered by a major market sell order overwhelming buyers. BitMEX is investigating potential misconduct.
- Bitcoin’s price has since slumped 7% in 24 hours, indicating the flash crash may have had ripple effects on the broader market.
On Monday, Bitcoin (BTC) experienced a flash crash on the cryptocurrency exchange BitMEX. Within minutes, the price of BTC plummeted from over $60,000 down to $8,900 before rapidly recovering back to $67,000.
The Crash
At around 2:40 PM UTC, BTC began falling precipitously on BitMEX’s spot market. In just two minutes, prices dropped from above $60,000 to a low of $8,900 – a level not seen since early 2020. The cryptocurrency then swiftly rebounded, returning to $67,000 within 10 minutes of the initial crash.
This extreme volatility was limited to BitMEX’s platform. On other exchanges, Bitcoin’s price remained relatively stable, trading around $67,400 throughout the episode. The discrepancy has prompted speculation about what may have triggered the flash crash.
Possible Causes
Some have proposed that a major market sell order could be to blame. According to one report, a trader placed an order to sell over 850 BTC (worth $55 million) on BitMEX’s spot market, overwhelming buyers and causing prices to plunge.
BitMEX’s Response
BitMEX acknowledged the incident in a statement on Twitter. While confirming they are investigating potential misconduct, the exchange asserted that the flash crash had no impact on their billion-dollar derivatives market.
BitMEX also temporarily froze withdrawals for accounts involved in suspicious activity. The exchange says it routinely takes such actions when investigating potential rule violations.
Impact on the Market
Despite BitMEX’s assurances, Bitcoin’s price has slumped over 7% in the past 24 hours. This indicates the flash crash may have had ripple effects beyond the exchange. The event could undermine market confidence and lead to increased volatility in the near-term.
