BTC-e Flash Crash 10/02/14

[minerpart]

So on BTC-e today the exchange rate for the currency pair BTC/USD crashed from +620USD to 102USD then back up within a matter of minutes. The majority of the move took less than 2 mins.






It looks like a repeat of the 2010 Wall Street flash crash where a large seller exhausted the buy-side of the market which led to 'HFT Bots' panic selling, before manual buying brought the market back to normal equilibrium.


http://en.wikipedia.org/wiki/2010_Flash_Crash
'The joint report "portrayed a market so fragmented and fragile that a single large trade could send stocks into a sudden spiral,"[10] and detailed how a large mutual fund firm selling an unusually large number of E-Mini S&P 500 contracts first exhausted available buyers, and then how high-frequency traders (HFT) started aggressively selling, accelerating the effect of the mutual fund's selling and contributing to the sharp price declines that day'


BTC-e user rundown on 10/2/14 - Users: 10374 Bots: 1078

So lets hear your stories: did your Bot just lose you 75% of your holdings?

[1715124915]

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[flipstyle]

One of the most ridiculous things I've ever seen in economics.  Ever.

Whoever was out of their right mind with sub 200 buy orders just scored themselves a nice early retirement bonus.

FML.

[Lauda]

Whoever dumped this is a fool. Imagine someone getting 1000 BTC at $150, he profited 4 times his investment in a couple of minutes..

[Mikcik]

One of the most ridiculous things I've ever seen in economics.  Ever.

Whoever was out of their right mind with sub 200 buy orders just scored themselves a nice early retirement bonus.

FML.

Well thats just plain nonsense about the retirement, but otherwise i cried here, my eyes are wet :-)...

congratulations to those who bought it around the 100 :-)!!! Fuckingly nice job guys!! :-)

But isnt BTC-E some selective scamming site? I know owners are anonymous which is not common in any other big exchange, also there has been some selective scams according to what i know...? Can someone verife it? I was thinking about joining also the BTC-e exchange (im on others now)  but this turned me away... hows the situation now?

[Catanonia]

All the talk of course on the BTC-e trollbox.

Common consensus is that the user typed 100 instead of 1000 sell order = FAT Fingers.

Either way, amazing...

[Lauda]

All the talk of course on the BTC-e trollbox.

Common consensus is that the user typed 100 instead of 1000 sell order = FAT Fingers.

Either way, amazing...

Actually it was over 10,000 if i'm correct.

[fr4nkthetank]

All the talk of course on the BTC-e trollbox.

Common consensus is that the user typed 100 instead of 1000 sell order = FAT Fingers.

Either way, amazing...

Actually it was over 10,000 if i'm correct.

yeah but to sell 10,000....you have to have 10,000 butcoins....

damnnnnnnnnnnnnnnnn

[Bobsurplus]

Just woke up to see some orders filled.. Never thought I'd see the day.

[Lauda]

yeah but to sell 10,000....you have to have 10,000 butcoins....

damnnnnnnnnnnnnnnnn

The volume says 12,102 BTC.
Well, there are some people who own that many coins..

Just woke up to see some orders filled.. Never thought I'd see the day.

How many BTC and at which rate?

[Bobsurplus]

yeah but to sell 10,000....you have to have 10,000 butcoins....

damnnnnnnnnnnnnnnnn

The volume says 12,102 BTC.
Well, there are some people who own that many coins..

Just woke up to see some orders filled.. Never thought I'd see the day.

How many BTC and at which rate?

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Wow, what a good wake up today has been.

[TheDragonSlayer]

This is what happen when u set a stop loss.

[Lauda]

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Wow, what a good wake up today has been.

Wow, you were lucky.
Consider donating some.. to a charity or something.
More good fortune might come your way.

[Cryptopher]

I'm gutted, I was online at the time, and I was going to put in a speculative buy order at around $300 for $1860 worth of Bitcoin. Would have made some huge profits instantly. Shoulda woulda coulda etc, but it is gutting to think that no more trade worries would be needed, could cash out my investment and trade on the profits.

Crazy day!

[xyzxyzxyz]

Btc-e offer margin trading and metatrader software so it could have been a margin call or leveraged trader panicking.

[Bobsurplus]

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Wow, what a good wake up today has been.

Wow, you were lucky.
Consider donating some.. to a charity or something.
More good fortune might come your way.

I think this good fortune came from here: https://bitcointalk.org/index.php?topic=401658.0

I'll have to find someone else to help now.

[minerpart]

My bet is on the guys who stole the coins from MtGox, stupidly cashing out in a single big sell order. It's pretty dumb, but it has happened like this every single time before as well.

That is a possible, but I think they would have used other exchanges to launder the coins not just BTC-e.

The large number of trading Bots operating on BTC-e must have played a large part in this flash crash. No-one would manually sell below $400 or $300 on BTC-e when other big exchanges are still holding above $500.

[Lauda]

I think this good fortune came from here: https://bitcointalk.org/index.php?topic=401658.0

I'll have to find someone else to help now.

Donate rather than lend.

[franky1]

i wonder if btc-e knows if the IP address of the main user selling such coin to cause this, is the same IP belonging to mtgox servers

.... although mtgox would be stupid to sell customers held coins on another exchange, from his own IP.

[vpitcher07]

Just woke up to see some orders filled.. Never thought I'd see the day.

If that's true congrats man.

[donate2me]

I doubt the price even went down that low. 

[DubFX]

yeah but to sell 10,000....you have to have 10,000 butcoins....

damnnnnnnnnnnnnnnnn

The volume says 12,102 BTC.
Well, there are some people who own that many coins..

Just woke up to see some orders filled.. Never thought I'd see the day.

How many BTC and at which rate?

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Wow, what a good wake up today has been.

Sutch luck...if you would want to exchange some bitcents i could make my gf show you her tits..
Well, joke i have no gf but can show u mine thought.

[donate2me]

ATTENTION:  Realize no one person bought or sold 10,000 coins.  IF, the price really did drop like that to 100, thousands of people bought and sold fractions, and maybe a 100 or 200 coins.  There was 100000+ transactions that happened in those few moments.....IF they actually happened at all.

[TheIrishman]

I think this good fortune came from here: https://bitcointalk.org/index.php?topic=401658.0

I missed that thread, I don't usually read the Loans forum. Amazing thing you and the other guys did there! Dogs are the greatest creatures on this planet, and this kind of thing helps me believe there's still hope for mankind.

[pr9me]

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Sutch luck...if you would want to exchange some bitcents i could make my gf show you her tits..
Well, joke i have no gf but can show u mine thought.

I don't think luck had anything to do with it. I believe he intentionally set the buy order, no?

"Such"...

[kokojie]

One of the most ridiculous things I've ever seen in economics.  Ever.

Whoever was out of their right mind with sub 200 buy orders just scored themselves a nice early retirement bonus.

FML.

Well thats just plain nonsense about the retirement, but otherwise i cried here, my eyes are wet :-)...

congratulations to those who bought it around the 100 :-)!!! Fuckingly nice job guys!! :-)

But isnt BTC-E some selective scamming site? I know owners are anonymous which is not common in any other big exchange, also there has been some selective scams according to what i know...? Can someone verife it? I was thinking about joining also the BTC-e exchange (im on others now)  but this turned me away... hows the situation now?

I'd say BTC-E's anonymity is a PLUS instead of minus, BTC-E has proven their colors with time, as a trustworthy exchange (well at least for the 2 years I've been using them, they have been trustworthy, customer service is great too).

Especially in the current situation, where Bitcoin exchanges are being targeted (the bitinstant arrest, Russia problem). Anonymity is actually quite re-assuring, that an exchange would not be gone quickly due to government crackdown.

[gog1]

BTC-e has been prone to flash crashes.  Their depth on the bid side's rather low, would not be a smart move to do a large market order.

[Lauda]

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Sutch luck...if you would want to exchange some bitcents i could make my gf show you her tits..
Well, joke i have no gf but can show u mine thought.

I don't think luck had anything to do with it. I believe he intentionally set the buy order, no?

"Such"...

I set 1,000,000 btc buy order at 0.0001$ sudden flash crash and it gets filled. That's surely not luck.

[nezarkadhem]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer. 
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

[Automatic]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer. 
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

[Cryptopher]

Actually if you check the raw data for the BTC-E transactions at 10:55am you will find that there were many Bitcoins sold to reach $102. It happened, those who had speculatively low buy orders ended up profited, most without even realising - what a great gift to receive.

I watched it happen and was sick that I didn't have my buy order in place, despite being in fiat. To those who profited, congratulations!

[nasthedon]

226 between 200-300, wish I placed my orders lower. But I never thought they would be filled at that amount anyway.

Wow, what a good wake up today has been.

Wow, you were lucky.
Consider donating some.. to a charity or something.
More good fortune might come your way.

It's not true. That user is known for trolling.

[nezarkadhem]

Actually if you check the raw data for the BTC-E transactions at 10:55am you will find that there were many Bitcoins sold to reach $102. It happened, those who had speculatively low buy orders ended up profited, most without even realising - what a great gift to receive.

I watched it happen and was sick that I didn't have my buy order in place, despite being in fiat. To those who profited, congratulations!

"many" ? -> elaborate please.

[nezarkadhem]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer. 
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

[Cryptopher]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer. 
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

Nope, for a start it happened on BTC-E, and not Gox.

What the seller did was select a low number and dumped many, many Bitcoins filling all of the buy orders up to and including at least partially $102 buy order. You can't buy a really low price on BTC-E, it simply matches you with the best price then works down the buy orders.

[5thStreetResearch]

Did this transaction actually happen?  Could have just been a mistick in the data feed.

[usabitcoinbuyer]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer.  
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

What Automatic meant was that in order for a buy order at $102 to be filled, *all* orders to buy *higher than $102* have to have been filled first.  This is a fundamental aspect of how any real exchange works.  So, your original description is incorrect.  What would actually happen is:

0. Assume the current highest bid is someone wants to buy at 10@$600
1. member 1 wants to sell Bitcoin
2. member 1 states his selling price. In this case, he inputs: 1@$102  This means 102 is the lowest he's willing to accept.  Obviously he'll take more if possible.  
3. The highest bid is 10@600, and so member 1 will sell 1@$600.  The best bid is now 9@$600.

If you don't believe me, go try it.  Put in an order to sell 0.01 BTC at $1.  You will get whatever price is shown as the best bid in the book (or close to it, if it changed during the moments you entered your order)

Now assume that the lowest offer to sell is at $700.

4. If member 2 wants to buy immediately "at market", he'll most likely buy at $700, because that was the lowest offer in the book.  It's possible if both orders showed up at the same instant that member 1 and member 2 might wind up meeting in the middle somewhere like $650, but I doubt any of the BTC exchanges would implement such an algorithm.  In no case should member 2 be able to buy for less than $600, because the guy who wanted to buy at $600 was there first, and gets priority.

What happens in a flash crash is something like this:
Suppose the book has buy orders for 10@100, 10@200, 10@300, 10@400, 10@500, and 10@600.
If member 1 tried to sell 55@$102, then he'd get 10 sold at $600, 10@500, ... 10@200.  That's 50.  The next 5 can't be sold for anything better than 102, so it becomes the best offer 5@102.  It will get filled when the next buyer willing to pay that shows up.

[nezarkadhem]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer.  
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

What Automatic meant was that in order for a buy order at $102 to be filled, *all* orders to buy *higher than $102* have to have been filled first.  This is a fundamental aspect of how any real exchange works.  So, your original description is incorrect.  What would actually happen is:

0. Assume the current highest bid is someone wants to buy at 10@$600
1. member 1 wants to sell Bitcoin
2. member 1 states his selling price. In this case, he inputs: 1@$102  This means 102 is the lowest he's willing to accept.  Obviously he'll take more if possible.  
3. The highest bid is 10@600, and so member 1 will sell 1@$600.  The best bid is now 9@$600.

If you don't believe me, go try it.  Put in an order to sell 0.01 BTC at $1.  You will get whatever price is shown as the best bid in the book (or close to it, if it changed during the moments you entered your order)

Now assume that the lowest offer to sell is at $700.

4. If member 2 wants to buy immediately "at market", he'll most likely buy at $700, because that was the lowest offer in the book.  It's possible if both orders showed up at the same instant that member 1 and member 2 might wind up meeting in the middle somewhere like $650, but I doubt any of the BTC exchanges would implement such an algorithm.  In no case should member 2 be able to buy for less than $600, because the guy who wanted to buy at $600 was there first, and gets priority.

What happens in a flash crash is something like this:
Suppose the book has buy orders for 10@100, 10@200, 10@300, 10@400, 10@500, and 10@600.
If member 1 tried to sell 55@$102, then he'd get 10 sold at $600, 10@500, ... 10@200.  That's 50.  The next 5 can't be sold for anything better than 102, so it becomes the best offer 5@102.  It will get filled when the next buyer willing to pay that shows up.

Yes you are right. I made a mistake assuming that if a buy order was placed for $102, and a sell order was also placed for the EXACT price, they'll get matched. But your flash crash makes sense. It means that all the buy orders were fulfilled. All the way down to 102. Insane.

[wickedgoodtrader]

Stop getting excited about the $102. It's not a big deal. It's just ONE successful buy order.

Here is exactly what happened:

1. MTGOX member 1 wants to sell Bitcoin.
2. MTGOX member 1 states his selling price. In this case, he inputs: $102
3. MTGOX member 2 wants to buy Bitcoin.
4. MTGOX member 2 selects: immediate buy

... MTGOX searches for cheapest buy offer.

5. MTGOX member 2 finds member 1's buy offer.  
6. Transaction complete.

He could have sold 0.0002 bitcoin for all we know for $102 - and it would have still showed up Bitcoinwisdom.

Last I checked for bitcoin wisdom to actually show the drop on the chart (and not the 'last offer'), ALL buy orders up to that value have to be removed.

Care to explain what your "ALL" statement means? You realize that an exchange means "exchange". It means I offer to sell a product for x, a buyer agrees to buy for x, and the exchange completes the transaction for a commission. There is no such thing as ALL. If there were 100 bitcoins for $102, then yes, all buy orders up to 100 bitcoins would have gotten it for that price. But that didn't happen.

What Automatic meant was that in order for a buy order at $102 to be filled, *all* orders to buy *higher than $102* have to have been filled first.  This is a fundamental aspect of how any real exchange works.  So, your original description is incorrect.  What would actually happen is:

0. Assume the current highest bid is someone wants to buy at 10@$600
1. member 1 wants to sell Bitcoin
2. member 1 states his selling price. In this case, he inputs: 1@$102  This means 102 is the lowest he's willing to accept.  Obviously he'll take more if possible.  
3. The highest bid is 10@600, and so member 1 will sell 1@$600.  The best bid is now 9@$600.

If you don't believe me, go try it.  Put in an order to sell 0.01 BTC at $1.  You will get whatever price is shown as the best bid in the book (or close to it, if it changed during the moments you entered your order)

Now assume that the lowest offer to sell is at $700.

4. If member 2 wants to buy immediately "at market", he'll most likely buy at $700, because that was the lowest offer in the book.  It's possible if both orders showed up at the same instant that member 1 and member 2 might wind up meeting in the middle somewhere like $650, but I doubt any of the BTC exchanges would implement such an algorithm.  In no case should member 2 be able to buy for less than $600, because the guy who wanted to buy at $600 was there first, and gets priority.

What happens in a flash crash is something like this:
Suppose the book has buy orders for 10@100, 10@200, 10@300, 10@400, 10@500, and 10@600.
If member 1 tried to sell 55@$102, then he'd get 10 sold at $600, 10@500, ... 10@200.  That's 50.  The next 5 can't be sold for anything better than 102, so it becomes the best offer 5@102.  It will get filled when the next buyer willing to pay that shows up.

Yes you are right. I made a mistake assuming that if a buy order was placed for $102, and a sell order was also placed for the EXACT price, they'll get matched. But your flash crash makes sense. It means that all the buy orders were fulfilled. All the way down to 102. Insane.

Daaaaaamn.. scary to think someone so clueless how an exchange works is in the bitcoin game.

[tertius993]

I can confirm that *all* my buy orders, which went down to $377, were filled that day.  In my case it was only small amounts, but it definitely happened.