What Caused Bitcoin Flash Crash Two Days Back? September 7, 2018 September 7, 2018 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsSeptember 7, 2018 by Kelly Cromley

What Caused Bitcoin Flash Crash Two Days Back?

The sudden crash in the price of Bitcoin (BTC) has sparked debate on the likely reason, with the conspicuous belief being the cancellation of a plan to establish trading desk by Goldman Sachs, which has confirmed the news to be fake.

Another possible reason for the plunge is believed to be the movement of about 16,000 BTC linked to Silk Road.

Whatever may be the assumption, there can be no denial on the fact that the $400 dip took the entire crypto community by surprise.

Now, doubts have been cast by various media outlets that a trader who had access to insider information took position before the news reached the market, eventually gaining the first mover advantage. The unknown trader, as per the data available, seems to have opened a short position worth ~$74 million (10,000 BTC).

One can argue that an exceptionally skilled trader has taken advantage of the overbought situation, which the market was fully aware of. However, the timing seems to be unbelievably coincidental. The effectiveness, quickness and the confidence shown in opening huge position has raised crucial doubts in the minds of all cryptocurrency traders.

There is no concrete evidence to prove manipulation of any kind. However, the incident has further decreased the possibility of receiving approval for Bitcoin based Exchange Traded Fund (ETF) in the near-term. Concerns over price manipulation were the prime reason for the SEC to reject all the Bitcoin ETF proposals as of date. Notably, the SEC is expected to announce its decision on the VanEck/SolidX Bitcoin ETF in 20 days’ time.

The entire saga indicates that the situation could have been avoided if the market did not pin its hopes on a crypto trading desk by Goldman Sachs. It should be remembered that the 2008 financial crisis is an outcome of unethical selling of mortgage backed securities by European and the US financial institutions and Bitcoin was primarily created for ordinary people to safeguard themselves from such a situation in the future.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.