Be very careful and attentive when selling your bitcoins

[criptoevangelista]

Hello everyone, I hope you are well.

I came to bring a case that happened in Brazil, an investor wanted to get rid of his bitcoins at the Novadax cryptocurrency brokerage (I've never used it, I can't recommend it, I'm just bringing the news). The fact is that he went to sell 1.7 BTC and generated a market sell order, with the lack of liquidity his orders were executed and consumed the entire order book taking the price to practically zero. He had bitcoins sold at 238 USD.

A huge loss just for not paying attention to selling at the price of the day, maybe he wanted to execute the orders quickly, or he didn't know what he was doing.

So be warned, if you are going to sell, fill out your order correctly at the price you want to sell, never use the "market" price to sell a large amount of bitcoins.

[DapanasFruit]

A huge loss just for not paying attention to selling at the price of the day, maybe he wanted to execute the orders quickly, or he didn't know what he was doing.

This is a sad story but one has Bitcoin and is really involved with cryptocurrency he should have learned the ins and outs of converting BTC to cash or maybe USDT in a centralized exchange. Am sure this BTC seller will never forget for the rest of his life what happened to his Bitcoin and getting almost zero in the process. One of the many things I learned with crypto is we must be allotting some time to educate ourselves even the very basic one. I know that this is actually a big hindrance for many hence crypto is not for all though it is very much open to all. So sad, indeed!

[NotATether]

People should sell their coins at an exchange that has a large enough liquidity and not one that lets them punch in a custom buy and sell price, if all they care about is liquidating their bitcoins. Because these user-set prices are only useful to traders. Almost nobody is going to want to sell at those prices. (The same cannot be said for buying.)

Most exchanges do a good job at hiding this discrepancy, by having buy/sell prices but just not letting the users change them.

[hitsnorth]

Damn, that's hard losing that much money just like that. I never sold BTC, but I was always careful selling altcoins, I used non-KYC exchanges and never had any issues.

[Natsuu]

People should sell their coins at an exchange that has a large enough liquidity and not one that lets them punch in a custom buy and sell price, if all they care about is liquidating their bitcoins. Because these user-set prices are only useful to traders. Almost nobody is going to want to sell at those prices. (The same cannot be said for buying.)

Most exchanges do a good job at hiding this discrepancy, by having buy/sell prices but just not letting the users change them.

Right. If you just want to cash out your bitcoins without getting into the trading details, it's smart to pick an exchange with lots of people trading. Some exchanges let you set your own buy and sell prices but honestly not many folks are likely to go for those prices when selling. It's different when buying like more flexibility there. Many exchanges keep it simple by not letting users mess with the prices which helps avoid some headaches in the process

[criptoevangelista]

People should sell their coins at an exchange that has a large enough liquidity and not one that lets them punch in a custom buy and sell price, if all they care about is liquidating their bitcoins. Because these user-set prices are only useful to traders. Almost nobody is going to want to sell at those prices. (The same cannot be said for buying.)

Most exchanges do a good job at hiding this discrepancy, by having buy/sell prices but just not letting the users change them.

A recent problem we have here in Brazil is that President Lula's government since January 1, 2024 has decided to tax all cryptocurrency transactions by 15% when using an international broker without headquarters in Brazil and exempting transactions made in brokers  that are based in national territory.

This forces people to use these brokers with little liquidity.

So, if a person is not careful, they can simply lose money in what should be a simple sale of bitcoins.

[HelliumZ]

Of course I use verified KYC exchanges with huge liquidity to sell bitcoins. However, I never use non-KYC exchanges. There are several precautions to be followed especially when doing Bitcoin exchanges. Of course, KYC verification must be used on such exchanges, exchanges with high liquidity should be used, and transactions with any third party should be avoided. There are several other things that must be known before trading.

[kryptqnick]

This is a very unfortunate situation. Of course, before selling BTC, one should do some research about the most reputable exchanges, and familiarize oneself with the interface of a chosen exchange before placing a big order.
In my experience with exchanges, I set the price of the sell order myself, so if it was near the market price, the order was filled very quickly, and if it was way off, it just remained an open order, but there was no way of my coins being sold for a price that I didn't set. It's terrible that it can actually happen on some exchanges, as the tweet shows.

[Zlantann]

Using popular exchanges usually has high liquidity that's the reason why people are attracted to them. I don't know why the Bitcoiner decided to choose Novadax when there are many other high-profile exchanges. He would have used a small sum to test the exchange If he was not conversant with the operations. Losing such kind of funds during this period can make someone depressed for a long time. People need to know that selling cryptos is a very sensitive transaction because it might be irreversible. Thus it is always important to read and have a proper understanding before engaging in any transaction. If you can't pay attention to details, you might face situations such as the one OP reported.

[xSkylarx]

This is really sad and you'll be pissed because it is your own fault for putting the numbers, probably he hastily sold it which is why he put the wrong number. I'm not sure if he can still get back his money, which he probably cannot. This is really a problem for those people who are not careful, because this is not like a bank where we can just raise this concern. This is my first time hearing this, as usually the error is sending it to the wrong address.

[Inwestour]

Firstly, you should use the services only on those exchanges that have fairly good liquidity, and secondly, you should never carry out such a large volume in one transaction, it is better to break it into smaller parts, for various reasons.

He may simply face blocking of his account, and the entire amount will become inaccessible to him, then clarification may take a long time. And of course, in this case, this is a human mistake, he should not blame the exchange for his mistake, he had access to all the information about the volumes and what he did not carry out before the transaction was only his mistake.

[MusaMohamed]

I came to bring a case that happened in Brazil, an investor wanted to get rid of his bitcoins at the Novadax cryptocurrency brokerage (I've never used it, I can't recommend it, I'm just bringing the news). The fact is that he went to sell 1.7 BTC and generated a market sell order, with the lack of liquidity his orders were executed and consumed the entire order book taking the price to practically zero. He had bitcoins sold at 238 USD.

It is possibly because he chose inappropriate order to use.

With this case, I believe the seller used Market order, not Limit order. If he uses the Limit order, it will not be filled at $238 for one Bitcoin.

Market Order: Definition, Example, Vs. Limit Order.

If seller used the Limit order but his bitcoins were sold at very low prices like this, it's a bug on the exchange and can be enough for a lawsuit against that exchange.

[Husires]

A platform that does not have liquidity of 1.7 BTC is a platform that should be avoided, but I wonder if it will be compensated, as some who lost their money due to technical errors were compensated, and if Novadax cares about its reputation, it may try to provide any type of compensation, especially since the amount is not large for a crypto exchange. Market sell order must be handled with caution, otherwise it may lead you to sell at a price completely different from the price you had in mind. Therefore, selling using limit order is much better, especially since you do not wait a long time if the order is close to the market price.

[MusaMohamed]

A platform that does not have liquidity of 1.7 BTC is a platform that should be avoided, but I wonder if it will be compensated, as some who lost their money due to technical errors were compensated, and if Novadax cares about its reputation, it may try to provide any type of compensation, especially since the amount is not large for a crypto exchange. Market sell order must be handled with caution, otherwise it may lead you to sell at a price completely different from the price you had in mind. Therefore, selling using limit order is much better, especially since you do not wait a long time if the order is close to the market price.

Novadax is a small exchange with trading volume about $1.5M last 24 hours. For Bitcoin trading pair, its total trading volume is about $420,000, not too much.

However, the loss is likely from a bad order used by the seller and maybe a technical issue on their exchange. If there is no technical issue, the seller must check buy wall and sell wall to see where is next big buy orders before initiate his sell order.

Additionally, selling must be split to some orders, not only one and of course using Limit order is safer than Market order.

[buwaytress]

Been 8 years and never made a mistake with addresses, or price, anything like that. Still double-triple check, probably a bit more than I should, but don't ever want to make a (literal) expensive mistake. Just a few weeks ago, sending to someone, they gave me a wrong address -- my insisting they double checked saved them... just not sure why you'd be leaving things to automation when doing money matters, never mind such large amounts.

Not saying I'll always be infallible but a good reminder to always just be safe. Even if it means using a more reputable exchange, and losing a bit more in a trade. Still. This was an easily avoidable error...

[Apocollapse]

This is the reason why don't create a sell order using the current rate, this will be an advantage for the buyer to drop the price since the liquidity is really low.

Of course I use verified KYC exchanges with huge liquidity to sell bitcoins. However, I never use non-KYC exchanges. There are several precautions to be followed especially when doing Bitcoin exchanges. Of course, KYC verification must be used on such exchanges, exchanges with high liquidity should be used, and transactions with any third party should be avoided. There are several other things that must be known before trading.

Do you think Novadax didn't ask KYC?

3. CADASTRO E IDENTIFICAÇÃO PESSOAL

3.1. Para utilização do SITE é necessário realizar um cadastro no SITE e enviar a documentação mencionada na POLÍTICA DE COMPLIANCE, a qual recomendamos a leitura, a fim de ter acesso aos SERVIÇOS da NOVADAX.

Non KYC exchange is actually better than KYC exchange, KYC is dangerous and useless, the problem is just the liqudity, but you don't have to worry if you're not in hurry. Just stick with trusted non KYC exchanges e.g. Bisq, Agoradesk, Robosats.

[Abu-Naim]

So be warned, if you are going to sell, fill out your order correctly at the price you want to sell, never use the "market" price to sell a large amount of bitcoins.

Order sells is always confusing if you are a newbie. It is not advisable for newbies to use order if they don’t have the knowledge about orders and how it works; the best thing to do is to use market orders just to sell immediately because if you place order and the order is not executed quickly, the price will affect it and some newbies don’t know how to cancel orders because some exchanges are very hard to use as they are not user friendly.

[Wapfika]

Hello everyone, I hope you are well.

I came to bring a case that happened in Brazil, an investor wanted to get rid of his bitcoins at the Novadax cryptocurrency brokerage (I've never used it, I can't recommend it, I'm just bringing the news). The fact is that he went to sell 1.7 BTC and generated a market sell order, with the lack of liquidity his orders were executed and consumed the entire order book taking the price to practically zero. He had bitcoins sold at 238 USD.

This is impossible to happened on huge exchange like Binance with huge volume on order book. That’s why it’s important depth chart to determine what’s the price with highest liquidity backing it aka as support wall.

The news is really sad because the user with huge holdings is very dumb and doesn’t care to do research first before he does the market sell. I’m not familiar with the exchange either but he can file a complaint about if the exchange has a huge trading and just suddenly remove liquidity right after he does the market sell on his holdings

[Don Pedro Dinero]

People should sell their coins at an exchange that has a large enough liquidity and not one that lets them punch in a custom buy and sell price, if all they care about is liquidating their bitcoins. Because these user-set prices are only useful to traders. Almost nobody is going to want to sell at those prices. (The same cannot be said for buying.)

Most exchanges do a good job at hiding this discrepancy, by having buy/sell prices but just not letting the users change them.

That's what I thought. I have sold several times shares on the market and I have never had a problem, if the exchange is big enough it sells for approximately what the share price is that day, and in cryptocurrencies it is the same.

A recent problem we have here in Brazil is that President Lula's government since January 1, 2024 has decided to tax all cryptocurrency transactions by 15% when using an international broker without headquarters in Brazil and exempting transactions made in brokers  that are based in national territory.

This forces people to use these brokers with little liquidity.

So, if a person is not careful, they can simply lose money in what should be a simple sale of bitcoins.

So by saving 15% you risk losing 99%, well, I'm not saying that I like Lula's law but if I lived in Brazil and even more so with this example, I would think twice. Another solution is to sell with a limit order, but in an exchange with low liquidity it can take ages to execute.

[franky1]

what most likely happened is the user typed in for instance 52.000 instead of 52,000  (period instead of comma)
so it sold down all orders from $52,000 down until $238 where all 1.7btc was eaten

also by using a crap exchange that only had <2btc between 52,000 down to single figures meant there was no order wall to prevent such drop
EG better exchanges that have more the 2BTC wall at 51,800 means the order would have only fallen to 51,800