Yikes! The crypto space never ceases to amaze, but this one seems straight out of a movie. Ether plunged by more than 50% on Kraken, the fourth largest cryptocurrency exchange in the world.
And to make matters even more interesting, this unlikeliest of events was caused by extreme selling, and not by a malfunction of the trading engine. At least, there is no evidence of the latter happening according to Kraken CEO.
This simply leaves the possibility of an Ethereum whale dumping his life savings. That, or the losses could have been exacerbated by the availability of margin trading and stop-loss orders on the exchange.
As reported, Ethereum, the second-biggest digital coin sank to as low as $700 from around $1,600 on the exchange.
And this tumble was distinct from the 20% drop many tokens had experienced starting Monday morning. That selloff was fueled by speculation that many cryptocurrencies are overvalued. In addition, institutional investors also seemed to be in a profit taking mood.
Nevertheless, Jesse Powell, chief executive officer of Kraken explained in an interview:
“We’re in the process of investigating. There doesn’t seem to be any evidence of a trading-engine malfunction. It seems like trades processed accurately.”
The exchange is not likely to roll back trades.
But the CEO has left room for some kind of compensation to clients that were affected by these dramatic moves. The company is currently looking into it.
All this wild west behavior is not deterring new people from jumping into the game. With soaring crypto prices over the past few months, Kraken is seeing five times the number of new clients compared to before the bull run started.
More action, less drama, please!
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