The cryptocurrency market for Ethereum plummeted late Wednesday and because of this some people saw thousands of dollars in value disappear. Good news is, things are back to normal, sort of.
The price of ether, the cryptocurrency of the suddenly hot Ethereum platform, has since rebounded and is trading back at about $318. The crash, however, remains as a big reminder that this is a volatile, new market.
Plenty of people have made small fortunes investing in these markets, but the get-rich-quick stories belie the risks that the average person faces if they want to get in on these new digital currencies. The vice president of GDAX, the Ethereum exchange which experienced the crash, spoke about the event, explaining that a “multimillion dollar market sell” was placed midday Wednesday.
Shockingly, the roughly 12 million dollar sell order cost the seller on .41 cents. Here’s a screenshot of an order CryptoTimes was able to find using the Ethereum blockchain explorer:
This is potentially the multi-million dollar sell that triggered prices to fall from about $317 to $224 and 800 automatic stop loss orders to go through—those are automatic sells set for when prices hit a certain amount. Hence some people who didn’t even mean to sell ended up dumping their ether for a small percentage of what it had just been worth.
“We understand this event can be frustrating for our customers,” VP Adam White wrote.
If you’re interested in this market, use this as a learning experience. This is the wild west of investing, and exchanges like these are not mature. These exchanges are susceptible to huge swings like Wednesday’s flash crash.
In a normal stock exchange, a multimillion sell wouldn’t throw everything off. As Omega One, a crypto currency trading platform, noted, the crash shows the problems with these exchanges. The millions of dollars that investors lost due to forced selling of their positions will not be recovered.