Bitcoin Forum

I'm sure by now everyone knows about the freak $100 Bitcoin sells on BTC-e and Bitfinex yesterday.

They were certainly very, very strange. In fact I don't think we've seen a move like this in the entire history of bitcoin. Yet too many people seem to be willing to dismiss this as an action of a dumb whale, perhaps magnified by trading bots/stop losses, and other traders panic-selling.

We need to wake up and pay more attention to this. What could've caused that whale to sell off? Even in December's crash which was more bearish and FUD-like we never saw this. From what I heard swirling around these forums it was somewhere around 5000 coins all at once on BTC-e. If a whale (or group of whales) were smart enough to accumulate that many coins, how could they have been stupid enough to sell off like that all at once? They must have lost millions of dollars.

Additionally, apparently MT4 went down for both BTC-e and Bitfinex during those brief candles. So far BTC-e owners have not acknowledged this, while Bitfinex has. This may or may not be relevant to the overall picture but it is another "weird" thing that happened.

I believe it can only be one of the two options below.

1. (Most likely IMO) It truly was a whale or group of whales selling off, and with a profit motive. They intended to quickly and swiftly induce a months-long bear market where they would be able to pick up cheap coins at the end. A bold plan, and it makes sense: if they could've sold the price down and held it down at an extreme price (say $300) for a couple hours, the momentum and panic after not seeing prices go up could induce a bear market. The conditions were very optimal: we were in the midst of Gox FUD and crash conditions to begin with, and it was 3am in the US, when most buyers would be sleeping. As mentioned before the trading bots and stop losses work in their favor with a drop that deep. Also, given the exchanges it occurred on, (low-volume btc-e), maybe there simply wouldn't be enough buyers online to buy the price up against panic sellers.

Some problems I see with this are:
-The entire "crash" was contained within a 1-hr candle on the charts, if they were going to be bold and smart about this they would have saved up some bitcoins to hold the price down in the next candles for appearances. They didn't.
-Why skip Bitstamp? Maybe they didn't have the coins to bring Bitstamp's books down, and expected Bitstamp to follow (or at the very least, equalize against BTC-e and Bitfinex) so that the price is still overall low enough to induce the bear. I still think this would be a gaping hole in their strategy, however.
-Completely wiping out the orderbooks all at once still seems like an inefficient way of doing things; there's not enough time for sell orders to pile up in all that space so the price can get bought up fast (which is what happened)

2. The government wants to bring Bitcoin down. It would make sense to do this in post-bubble conditions when you don't need as many coins to burn through the books since trading volume is down. Also, a large number of bitcoin-days were destroyed a couple days before this crash: maybe it was an off-the-books purchase for this exact purpose? Anyhow, if they were going to destroy Bitcoin, it would make sense to do so now, when the stock markets are shaky and people are looking for other places to store their money. In fact a fraction of the Silk Road coins alone would have been enough to pull off last night's shenanigans. And what better exchange to manipulate than BTC-e (anonymous owners, back-room deal possibly)?

Some problems:
Why would they do this before they've sold their Silk Road coins?
Why would they even sell their SR coins in the first place when they can use them to kill Bitcoin?
If they really wanted to destroy Bitcoin, infiltrating the mining pools and killing it from the inside would probably be less expensive. (However this is a technical kill, so people might move to Litecoin or make another coin in response. Maybe it's better to have people believe that market forces (themselves) are killing Bitcoin?

EDIT:
3. Somebody wanted to dump stolen coins. (Thanks Le Happy Merchant!) They dumped in a crash to camouflage their actions.

Some problems:
They still could've gotten a lot more money for their coins if they had patience and sold them off more slowly. In fact, selling coins off slowly would be blending in more wouldn't it? Still, a very likely scenario.

4. A mistake/typo, and somebody somewhere committed suicide today.

Some problems:
On both BTC-e and Bitfinex? Two exchanges at the same time, same typo, typo'd exact #'s of Bitcoin needed to sell to $100?



In conclusion, I see all three of these options as more probable than a dumb whale losing millions of dollars. If it is option #2, we have something to be concerned about. In fact I was posting in the comments on Yahoo News today, in both of the front-page articles about Bitcoin, and I noticed that my pro-btc posts were getting deleted. I must've posted the same thing 15 different times on two computers on two different Yahoo accounts. I swear this happened. We are getting censored on the mainstream news sites...

I'd be interested to hear other opinions on this as well.

Even the stock market has flash crashes.

Also, what if the coins were stolen and the owner thought a period of panic would be a good time to dump and avoid suspicion?

Forced margin liquidations into thin books. What do you think a solution is?

This is a new occurence on btce problably because they just implemented MT4.

During higj volume mt4 will time out trades and also server can control when to stop updating clients etc.. so they may have known .. the thing is im sure margin calls were hit on leveraged long traders and mt4 will automatically close you out even though you cant trade...

Ive said it a million times on this forum do not trade via mt4 if your leveraged!!!! Use it for charting thats it.

Im sure it was more than just a whale.

Im interested to know who all got in sub $200.. it happened in daytime uk so north america was sleeping i caught the end of it.

I was paralyzed with fear when this was happening. I had an array of orders on bitfinex between 250 and 550 but I cancelled them all because I didn't want to have my account liquidated in the event that bitcoin was actually dying due to irrepairable protocol exploitation or failure. If I left the orders, I'd be about $100,000 richer right now (or I'd be liquidated, I'm not sure... or maybe the trades would have been rolled back)

the got hacked  ;D


--source: my cat

It appears that someone dumped around 20k bitcoins all at once, probably scared that Bitcoin was broken. Or it could have easily been an early adopter with insider knowledge at MtGox who shorted just as the news came out.

Speaking as someone who has been paranoid about the 25k the FBI is preparing to sell the reaction of the market gives me hope. It dropped on a 20k sell and bounced right back. That is pretty significant. It eases my worries about a 25k sale quite a bit.

Plus I am glad I had a big purchase set up at around 600/BTC.

Dont leverage bitcoin maybe?

The majority of the bounce back could be just the same people who sold buying back once they read the issue was a not a big deal or closing their shorts and trades, rather than it being new investors. But if the FBI dumps 25K, NONE of those coins are getting rebought by them.

On BTC-e though? I hear fiat transfers out don't always work...

But this is good thinking. Actually a very valid scenario, thanks for sharing.




This makes sense on the surface but if so, very many people lost a LOT of money liquidating their positions yesterday. A LOT of money. You'd think there would be more stories and people sharing their nightmare experiences.

I don't. The sale was either a mistake (typo, etc), or it was made by an idiot. Perhaps they didn't check the order book before selling, and hence weren't aware how much the price would fall. Maybe they were drunk at the time and had a lapse in judgement.

If you wanted to manipulate the market and cause panic, selling your entire stash in one sale doesn't seem like the best way to do it - it gives away the fact that it's just one person doing it. You want people to think that everybody is selling all at once, so it'd be much more sensible to make multiple continuous sales of smaller amounts.

The $102 sale doesn't bother me at all. Someone really regrets it now, and that's the end of it as far as I'm concerned.

maybe we know better than to come cry here about our losses expecting sympathy.  ;)

Perhaps. But I am sure that a lot of people are holding fiat ready for that day.

That was the only reason I was able to buy a bunch when it crashed. I am surprised that one long position I have lent out on BitFinex did not get squeezed out and they still hold my loan.

Updated the OP with new possibilities. Keep them coming! I believe with crowdsourcing we can figure the most likely possibility.

It could be, but take into account that the orderbooks were just wiped out after that huge sell. It wouldn't take a lot of buying to buy the price back up, just a couple hundred people in fiat in the right place right time should do the trick.

Someone explained it to me rather simply. There were 3k bitcoins on the orderbooks IN TOTAL. For whatever reason an order went through for 3k coins and BOOOOOM down to $100 for a split second. Why someone bombs the orderbook like that is another question, but it probably was some sort of leverage unwind that created a domino effect.

The so-called bug is known for years. This suggests that you have no idea in what you are investing, and even worse, investing with margin

The most recent incident that might really have killed bitcoin was the hardfork in March 2013: https://github.com/bitcoin/bips/blob/master/bip-0050.mediawiki

Very good theories from the OP. I find it very difficult to believe that someone was so stupid that just accidentally set a huge sell order without price limit..

Maybe they where hacked dirty coins ? They were trying to clean them up ?

yeah, I break out sweating filling out my little orders on BTCe, one should triple check when selling thousands of BTC.
It came at a suspicious and vulnerable time.

Does nobody think that it could be the central banksters trying to crash bitcoin price?
That was the first thing i thought of.

Gox engineering a dump to push the price down so they can buy back the coin they have double transactioned. (not Double Spent - but sent out twice due to the transaction ID alteration), so they can meet any shortfall they may or may not have.

This gets my vote. The timing of the dump and the press release was just to tight for coincidence.

Bitcoin is going down. Anyone holding bitcoins now is a complete moron.
If yesterday's actions, and news about a major, unfixable bug in Bitcoin Network, didn't change your mind, you DESERVE to lose all your assets, and I wouldn't feel sorry for you if you lost everything & committed suicide.

Sell now people, I am being serious. This ship will sink very soon.

 ;D you missed the boat and still want cheap coins. Away with your FUD!

Dude, the world's largest Bitcoin exchange, there since the beginning, likely holding hundreds of thousands of bitcoins (10s of millions of $) just basically told everyone they're shutting down. (But in a way reminiscent of inputs.io) There's no way to pretend yesterday didn't happen. Bitcoin will be dropping.

And at the minimum they told they aren't up to level of competence they need to be. So there might be doubts about other exchanges. One shouldn't really give away money, especially when it isn't theirs...

Exactly, they are all fucking idiots.
Let them hold, I don't care if they lose money lol. They don't realize that the money they hold in bitcoins now is just air. It will vanish just as fast as they gained it. They are delusional morons who think bitcoin will be worth $100,000. Hahahaha, soon they will realize that they could've sold at the AMAZING, INCREDIBLE price of $700 when it drops back to $100, lol.

FBI has yet to sell 144,000 Bitcoins. Yesterday's crash was caused by only 3 to 6 thousand coins.
If they dump 144,000 bitcoins, it will drop back to $20 in no-time.

yawn another butthurt noob who probably sold @450, i can almost taste your tears from here. Welcome to the ignore list son.

Some pages in this thread I don't see any posts at all  ;D

It definitely happens from time to time, you would think someone having 5000coins will never make the mistake but the truth it can happen, it is less likely than someone making a 1BTC mistake but it can happen in a sell off

I don't think we will ever know for sure what happen but we cannot rule out the mistake, it is still the most probable explanation even if it seems weird

A similar event occurred on bitcoin-24 during last years april rally (although not simultaneously with an actual 'crash'). In that case, the reason was that someone figured out how to hijack users login sessions, and then proceeded to transfer all their coins all to his own account by placing a buy order in the very thin USD order book and then selling all the coins in the hacked accounts to himself. Perhaps his bid order was too small, but it took the price down all the way to $0.

However, I think Hanlon's razor is appropriate here.
>Never attribute to malice that which is adequately explained by stupidity.

Just a big panicky whale that made a typo in the heat of the moment and bought a very expensive ticket for his spot in bitcoin history.

Dude, that's just too dark. Congratulations on being my first ignore. Anyone that matters has been ignoring gox for ages.

Nope, haven't held any major amounts of Bitcoins since December. Although I did sell at $450, $350, $250, $150, and $100. And $1200, $1100, etc too. Check out my LocalBitcoins profile, I'm far from a noob. Enjoy your rapid depreciation :)


"Children, fingers in your ears and make the la la sound!"
http://www.youtube.com/watch?v=e3mxVjB4aqI

apparently it was / is possible to have short positions / leveraged longs on MT4 and bitfinex.

the plausible explanation is that a bunch of long positions were forcefully liquidated during a margin call. this caused ridiculous market orders to be executed.
additionally, the total market depth on those two platforms is not spectacular, so "only" about 8000 coins were needed for these two spikes.

this in itself was not "criminal" - this is the risk of leveraged trading. what was problematic was that the platforms went down, with people trapped in their positions unable to trade. this should trigger an investigation by a business consortium or a government agency.. but since this is Bitcoin, nothing will happen.

It was not mistake, someone with inside information sold all his coins, knowing that when the real crash starts, he wouldn't be able to sell it for even 50 (When FBI dumps 144k coins, bitcoin will go straight to 10 dollar).

And I and many others with me will be thrilled to buy at $10. Because the technology that is Bitcoin hasn't changed, the fundamentals haven't changed. There are still more companies accepting it and no technical flaws were discovered. Just one incompetent company showing the world they're incompetent while trying to shift the blame.

MtGox dying may cause a temporary dip in the price, but in the end we'll be better off. Just like when Silkroad closed down.

does it affect traders who are short at bitcoinity?

There you may buy options, futures etc. <- this market was affected!?

Its all a game from governments and big company's. Friday, when MtGox had bad news, also Apple came at the same moment with bad news for btc. And that same day also Russia came with bad news about btc.

As you all can see, yesterday morning, around 11.00 (dutch time) someone dumped btc for 111 milj. euro's. You can see a huge dip in the rate. It was at the same time MtGox came with the news update. I was nice to see that the btc rate was coming up fast again.

So at this time, the btc is around 500 euros. +/- 100 euro less than a week ago. Nothing really bad happens till so far...  A little downgrade. If you are trading company shares on Wallstreet, you know this is business as usual. So do not worry. Comanies at Wallstreet can go bankrupt, a coin cannot.

You see at the news that also big companies and governments see that a virtual coin is the future. The Sverbank from Russia want their own coin. The US Postal Offices wants a PostCoin. Apple wants his own coin, the Applecoin. The JP Morgan bank wants his own coin. So the big ones are knowing that virtual money has the future. And Bitcoin was first.

I think the rate will come up in the next weeks. The bitcoin has a little hurt, but not much.
So stop complaining and go on into your neighbourhood and promote accepting bitcoins at your local stores. Thats the only way to create a real bitcoin economy!

Don't fool yourself. The effects of the closing down of Silk Road are yet to come. Remember the 144,000 coins the FBI took? Not dumped yet.
So don't fool yourself, the closing down of Silk Road didn't have an effect... YET.

144K coins are a little bit more than 1% of the current amount of coins in circulation. If they get released, the total amount of available coins barely changes. Sure, if the FBI market-sells them on an exchange it would temporarily crash the price, but they're not that stupid. The coins will most likely be sold in one or more auctions where some large whale will be happy to scoop up 100% legal and accountable coins.

Another likely explanation is that some whale had his bot set up with a stop-loss at $600, which would also explain why it happened simultaneously on bitfinex. Looking back at the chart minute by minute, it happened the exact moment the price hit $600.


He did not need to have inside info, since it happened very shortly after the announcement came online. I sold manually prior to the event, and fortunately had already placed a few (small) buy orders down to $275. Thank you mr. mystery whale!

it could be a huge manipulation as a marketing strategy... so more people will inject fiat into exchange waiting for another "crash" ;D

you just need to be fast enough to buy all coins you sell ...

Dude, stop your bullshit with your ''amount of coins in circulation.''
You have to look at what is traded, the volume on exchanges. That's what counts in a market.
There are hundreds of trillions of USD in circulation, that doesn't mean crap on Wall Street. You're clearly too stupid to realize that.

All exchanges combined don't even have a 144,000 bitcoin volume (and some even fake their volume, especially Chinese exchanges).
If 144k coins get dumped, it will ruin bitcoin's price. And not just temporary.

The market depth of BTC-E is good to notice.  It's supply and demand.

In a way Silkroad bust might have even increased the price. As there is less coins used in circulation opposed in holding. I think relatively large share of those 144k coins were in use as currency which means they were traded and not stored... Which meant availability on exchanges which lowers the prices...

This is my first time posting, I've never bothered to do it before but i got to share my fear on this matter..
What can someone who stole a bunch of BTC and has very limited fiat do to cover his traces?
I would make a flash crash on a low volume market and prepare everything i have on several accounts to catch the low figures and buy as many clean coins as i could.
I would prolly lose 3/4 of coins but i get clean 1/4.

LoL ! Well that worked out well then, given that the trade was about as camouflaged as a rhinoceros in a bird cage  :D

I am glad you brought up the post about not glossing this over, it was an extreme anomaly and was crazy to see.

My personal opinion was that it was human error, but I have never sold BTC on BTC-E so I do not know if any sort of queue's pop up before you confirm your sale or anything.  My off the wall thought, or you could call it the conspiracy theory thought, that is just for fun and not something I truly believe....is that there was a single person or group of persons responsible at MtGox for the bug on their end that eventually led to the crash, and they were forced to sell their personal wealth of BTCs at $102 OR ELSE!

Anyways, I hope the true story comes out but until then I am sure we will get many guesses..

Why do you need all that fiat at once suddenly? Why not slowly sell it on the exchanges, inconspicuously? A 75% loss is stupid, there are plenty of bulk buyers who'd pay cash and take a relatively small margin.

just think harder guys, harder dammit!

I don't think you folks quite appreciate the psychology of the moment yesterday.

I was trading on BTE-e when that sell went through. I had BTC-e's trading page open in one Browser windows (Safari 5.1.10, MacbookPro 2009) and Bitcoinwisdom 5-minute chart in another.

Trollbox had been on hyper yellow alert all night due to waiting for the Gox announcement. When the announcement came through, there were a couple of minutes of general discussion before trollbox trollers started screaming that the Bitcoin protocol was broken. This rapidly became the concensus in a period of about 3-5 minutes of frenzy. At the same time, the price started plummeting from around 710 to 600 in the space of a few minutes. People were dumping like crazy - you can see it if you go to the 30m chart here http://bitcoinwisdom.com/markets/btce/btcusd - those 2 big red candles around 11 O'Clock GMT yesterday.

I managed to dump 1 BTC at around 610 (after frantically liquidating PPC and XPM just to get into some fiat) and just then I saw the price ticker on Bitcoinwisdom display $300, then $110 which lasted about 10 seconds. That kind of sealed it for me that BTC was "finished" but since I've only ever got a small amount on the exchange, I decided just to sit back, watch the show and accept whatever losses were coming my way.

Obviously the rest is history as it turned out, BTC wasn't broken and once this started filtering through, a buying frenzy began and it leapt back up to 620 in no time making it very difficult to get back in unless you placed orders about $30 above the current price to give yourself a few seconds lead time on the order book.

To me, the $100 trade was just a panic sell - plain and simple. Things were happening so fast that everyone was trying to offload faster than everyone else. The price dropped $150 in less than a minute so I'm not suprised that someone with a lot of BTC to offload might have simply been trying to minimise their losses by buying up everything left on the order book before the crowd did. The only way you can do that is to put your ask in very low and let the trading engine pick up all the remaining bids for you on the way down to that base price.

It really did look like it was potentially going to $100 (or zero) over the next 5 minutes.

I don't think there's any need for people to start turning themselves into an army of crypto-market Columbos over this episode when a perfectly plain explanation is staring us in the face.

I think that the simplest explanation is good enough.  Someone had thousands of bitcoins sitting in his BTC-e account.  He reads the MtGOX release, undesrstands it to mean that Bitcoin is finished, so he rushes to sell it all, at any price, before other traders read that release and pull out all their bids.

Either him, or someone else who reasoned like him, had another large pile of coins at Bitfinex and did the same.

Actually many people did the same in all markets, that is why the price crashed.  The only difference is that no other panicker had as many coins as those two.

In that situation, a trader either gets convinced that bitcoin is finished, or dismisses the claim as absurd and believes that the bug will eventually be fixed and forgotten.  The latter will probably guess that others will panic and there will a temporary crash, but is confident that the price will rebound; therefore he will wait, and will buy when the price gets low enough.  The former can only conclude that the price is about to fall to zero and will stay there forever, so for him the most rational decision is to sell everything he can, while there are still traders who did not realize that.

Owning a lot of bitcoins does not turn one into an expert in bitcoin algorithms.  It is not even a proof of intelligence.

That dump was a loss only if the coins were bought for more than 200 $ or so.  If they were bought at 10$, the trader still made 2000% profit from his investment.  Sure, he could have made more, but that does not make him a loser.  (People who still hold bitcoins that they bought six months ago could have sold them for 1200$... )

As for the government, if they wanted to kill bitcoin they would simply declare it subject to SEC rules.  No assets, no revenue, no dividends? You cannot sell it.

As for the FBI-seized coins, I see no reason why the the government would not sell them through public auction, as required by law.  The money will go to the Treasury, so they will not go out f their way to get the best price.   At most, they will split the stash into a dozen separate lots to make the auction sufficiently competitive.  And they do not care at all about the effect of the auction on the price (which should be small anyway, given the number of coins in already in the market).   

Your post is convincing. However the fact that it occurred on both Bitfinex and BTC-e simultaneously still nags me in the back of my mind. If this were true it would have made more sense for it to occur only on one exchange, or on all exchanges.

Assuming the epic drop was just a mass panic sale, it could be a glimpse into the future.
When the market mood will be at it's lowest (at the very bottom of wave C) this support level might get tested again on BTC-E.

I like the logic of the doom people...

Whale would be too smart to dump all those coins at once and tank the market.  They lost millions of dollars, something's up!

Meanwhile, they also shout that the FBI is going to dump all their coins at once and tank the market...

Hmmm, does anyone else see the silly logic here?

To the OP, you're entire premise is based on the idea that no one who has accumulated 5,000 coins would be "dumb enough" to panic sell them.  Which is a completely faulty premise.

Here's what I wrote elsewhere the other day, "Even if they were an old hand, you have to remember that doesn't necessarily make you terribly wise... a lot of kids in their late teens/early 20's probably mined thousands of coins a few years ago.  Just because they got lucky and heard about bitcoin very early, doesn't mean they necessarily know wtf they're doing.  It just means they were in the right place at the right time."

It doesn't take an economic genius, or even someone particularly savvy, to mine a shit ton of bitcoin back in the day.  It just took someone who stumbled upon it at the right time.  So the idea that someone who has 5,000+ bitcoins couldn't panic and make a bad decision or a mistake is a bad premise to start with.

Most sensible post here.

The sell-off had nothing to do with the use of bitcoin as a currency.  Bitcoin is worth the same today as it was yesterday.  Two factors caused a financial event for speculators:  A false PR report by a broken company, Mt. Gox, and leveraged long positions facing margin calls.  You may recall the same thing happened to the stock market in 2008.  Perhaps the NYSE has immature infrastructure that means the U.S. dollar is not ready for prime time?  Unlike the stock market, bitcoin resumed normal pricing within hours. 

Everything is working as intended, here.  Except of course for Mt. Gox.

Could have been generosity, if I had 10,000 + coins and wanted to fill some dreams.... why not?  Chances are if I did have 10,000 + BTC I paid single digits or less for them, why not spread the wealth and take a huge profit at the same time.  Not worried.

Indeed. Being liquidated is the risk of leveraging. If you choose to use leverage be very sure to do it safely.

I think the issue we all keep ignoring is the broken trade matching systems these exchanges use. There have been posts from people on btc-e and bitstamp who did not have their limit orders executed even with the price moving through them. The same thing has happened on gox in the past, thats why we see big sells plow down through the order book and the price instantly recovers because of all the missed orders and orders placed during the execution of the large sell. These trade matching systems are broken and need to be rewritten or replaced with real off real off the shelf systems. We get lag in an exchange because of this as well, each transaction appears to be handled on an exclusive or semi-exclusive basis. Momentum locks up the db, limit orders do not get fully filled, traders can not react, market makeing bots can not update their orders, and we get a mini flash/lag crash. We need exchanges that operate like real financial market exchanges, written by people with experience in them or at least learning from their mistakes.

Everyone is assuming all the trades were at arm's length, which they may not have been. If a broker has an order to sell at $500 if the price gets to it (a stop order), and you own a certain % of the orderbook, it is in your interest to fill your own orders down to a certain point, then bid for the offered coins. Yeah, some people got cheap coins at the expense of the large trader, but he was able to score the majority at $110.

It works because few people have large standing orders in the $200-$500 range, the only reason you would get filled is when you don't want them.

Probably gox. Seen a couple posts saying they allow fiat withdraw now, if they were insolvent this could be how they got the money. Of course, this theory would imply that they are now insolvent in btc instead.

>Implying they'll ever dump it for dollars (of which they have infinite).

If bitcoin drops to 100 again, im pretty sure alot of people will buy a few more bitcoins ;)
Sp yea the coins are getting rebought. Maybe not back to Original level, but they will be bought.

Very good points. Exceptional  :)

Some were suggesting that MtGOx or parts of their core owners is/are directly involved - to rebuy coins cheaply and thus avoid going over the cliff.

What is your thought on this? Thank you.

You are 100 % wrong since this happened on BTC-e AND Bitfinex simultaneously. In both cases down to a price of 100 / 102 $

This is not just a 'mistake'.

I believe this is not accurate - at least not for Bitfinex. I had limit buy orders executed well and was watching it happen and stay at 100buy vs 600sell for several minutes. The platform appeared to be working and intact during this time. So, the "flash-crash" was not a matter of seconds, but rather at least minutes.

It certainly was a large flash-crash, nearly 10-fold.  I remember witnessing a near 1000-fold flash-crash on Gox (mid-2011, it turned out someone hacked the exchange).


Why?  Given the much more substantial problems of scalability, dominating mining pools, and government regulation, why should we worry about such a non-issue?

If a whale is able to profit from creating a flash-crash then I say good for them.

You can't sell on BTC-e at market price so it's not mistake/typo/thin orders.

Probably either panic, stolen coins or some leveraging got busted.

This kind of crashes show how weak the whole ecosystem is. I agree with OP, what happened on BTC-E should be written in the damn history books of bitcoin.

The market is unstable. And while I don't advocate for 'SELL AND RUN', I'd say that only the ones that have the guts to watch falling to 100s to HOLD. Other's should sell portions now and diversify.

To clarify.  I see this flash crash as a non-issue as far as Bitcoin is concerned (which is what I believe OP was considering).  People that are worried by this spike certainly should be paying more attention and should reduce their holdings until they feel comfortable.

It is a neat event for the history books, I'll give you that.

I had a buy order at 515 and hit during the Bitfinex flash crash. Made a killing... all luck. My friend had a short position that should have closed during that time but it did not.

My theory: the current DDoS of bitcoin is done to destroy bitcoin, not to profit from it.  Maybe it's an entity that wants to destroy competition (a government), or someone who is jealous they missed the bitcoin billionaire boat and wants revenge.

MtGox et al still haven't declared how many bitcoins have been stolen using the DDoS.  They simply don't know at this point.  If I was trying to destroy bitcoin I would take some of my plundered goods and dump them on an exchange and see what happens.  Maybe I would spark a mass sell off and crash that helped me in my anti bitcoin goal?

Was it a whale panicking and dumping their load all at once?  Unlikely.  The market was pretty stable right before the flash crash.  It's not like a speculator was sitting there looking at their millions disappear into the ether and wanting to salvage something, anything, from the situation before the value crashed to zero.

Maybe the hackers are actually good guys. They've brought the issue up before but the dev team was too lazy to fix it. Now they have no other choice than to exploit it so that it get's fixed. They want to do it now while there's still a chance before bitcoin becomes mainstream and commercially used and it's too late. If it happened later it might damage bitcoin and everyone involved too much.

you can't destroy bitcoin by just selling it to death. the selling has to have some substantial fundamental reason behind it in order to do so

The answer is really easy.

The feds butt RAPED the Silk Road guy in jail with a 2 by 4, until he squealed out his private key that unlocks his wallet.

So, with the 600,000 or so bitcoins in there, they went ahead and started selling lots at $100 per BTC, just so they could fuck with the exchanges.

Then they arrested the Bitstamp CEO and buttraped him too, and told him the story to put out. They found some skeleton in the Mt. Gox closet to black mail them also.

It's pretty fucking obvious, a caveman could figure this one out.

Start buying folks. The gubbamint is handing out free money, essentially, which is what they do best.

Oh, that's awful. I thought they just waterboarded him at Guantanamo Bay or fed him scopolamine.  ;D

Exploiting a vulnerability in bitcoin's design while stealing bitcoins, causing exchanges to shut down transfers would be a pretty good time to dump bitcoins on the market if you wanted to affect the useful stability of the commodity.  At the very least it spawns "Major bitcoin exchange shuts down" headlines and makes people who want to conduct business and trade using bitcoin wonder if they can handle the massive daily swings and risk of losing their money.

welcome to Bitcoin lol

They probably just forced him to take shitty Nboms and bathsalts till he puked his password out

It is pretty unlikely that it is what happened. Someone that stole so much BTC may not risk in on a plateform if it is "tainted BTC"



I have read a few possible explanations so far :

-Human error
-Apetersson's plausible explanation : "the plausible explanation is that a bunch of long positions were forcefully liquidated during a margin call. this caused ridiculous market orders to be executed.
additionally, the total market depth on those two platforms is not spectacular, so "only" about 8000 coins were needed for these two spikes."
-Conspiracy theory to weaker Bitcoin
-A big sell order to activate automatic limit losses and profit from it



Bitcoin is great but the BTC exchanges have a lot to learn of NYSE and Nasdaq or at least they are not using the same amount of human capital and technology, NYSE and Nasdaq work smoothly enough, managing huuuge volums without many hiccups

144,000 sounds like a lot of bitcoins, and it is, but 144,000 new bitcoins are created as mining rewards every 40 days. Selling 144,000 bitcoins would have a big impact on the price temporarily, but would be negligible in the medium and long term.

Sumting wong! as our foreign friends may say.

My speculation? Adverse order flow toxicity (http://jheusser.github.io/2013/10/13/informed-trading.html). If you feel like learning, go read up on VPIN, order flow, information theory, and GARCH.

This is actually good news because when it eventually is corrected, it will just be one more example of how resilient is protocol is.

That was a simple long squeeze, not much about it.