- Bitcoin (BTC) lost around 87% of its value on Bitmex as it dived from $68,398 to $8,900 within minutes.
- The cryptocurrency exchange said an investigation is ongoing, but the massive dump of hundreds of BTC by a single address was the likely culprit.
Bitcoin Goes from $68,398 to $8,900 on Bitmex
A peculiar event suddenly sent ripples in the Bitcoin market as a “rogue seller” caused the price of the prime cryptocurrency to crash from $68,398 to $8,900 at the Bitmex exchange around 10:40 PM UTC on Monday. All 87% of BTC’s value in US dollars was wiped out in minutes. However, its price climbed back to the $67,000 mark 10 minutes later and has stabilized since.
Bitmex immediately acknowledged the anomalous transaction that shook the market with the assurance that all its users’ funds were safe. It explained that although the incident caused volatility in its BTC-USDT spot market, neither its derivative markets nor the index price of its XBT derivatives contracts was impacted.
The platform has also clarified that it has frozen some withdrawals initiated by accounts suspectedly linked to the flash crash.
As we await the results of Bitmex’s official probe on the matter, there have been contrasting claims about the amount of BTC actually involved in the flash crash. Some analysts on X said the sell-off of more than 400 BTC triggered it, but the investigation and tally of the pseudonymous “syq” on the social media platform placed it between 850 BTC and nearly 1,000 BTC.
The Nature of the Flash Crash
The Bitmex incident wasn’t the first Bitcoin flash crash in history. There have been similar occurrences in the past, but the Binance crash in 2021 somehow mirrored the magnitude of the Bitmex situation wherein the leading crypto by market cap briefly tanked from $65,000 to $8,200 in the world’s largest crypto exchange. The problem was traced to a faulty algorithm in Binance, but the one in Bitmex was allegedly catalyzed by a “rogue seller.”
TradingView defined this type of trader as a seller who dumps a massive supply of a certain asset without consideration of its possible impact on the market. However, it is not also dismissing the probability of a faulty algo like the Binance case three years ago.
BTC Price Now
So far, everything is back to business within Bitmex amid the pending investigation of the flash crash incident. As of this writing at 11:50 AM UTC on Tuesday, Bitcoin is trading at around $63,200 with a 7% dip in its 24-hour price. Meanwhile, transaction volume was up by 64% as $67.25 billion worth of BTC moved between addresses.
The price movement of Bitcoin in key indexes like CoinMarketCap may not have been straight-up affected by the Bitmex affair but it drove the values all the way down to $62,478.44 from a peak of $68,552.94 within the one-day frame.