Bitcoin flash crashes $500 on Kraken, BTC still in 'wild west', trader says

28 May, 2019 | Updated: 28 May, 2019
by Jelmer van der Dussen
Bitcoin
Bitcoin flash crashes $500 on Kraken, BTC still in 'wild west', trader says

Bitcoin has seen a sharp drop on Kraken earlier today in the XBT/USD market (XBT being BTC's symbol on Kraken). Bitcoin flash crashed from $8722 to $8200 and climbed back to the old levels within seconds.

The flash crash is visible on this chart:

XBT/USD Chart provided by Tradingview

Kraken has not published a statement explaining what happened on the exchange. It's possible that someone accidentaly sold Bitcoin more than $500 below the price, or that manipulation was in play. Due to a lack of liquidity in the market, Bitcoin couldn't be prevented from dropping all the way back to $8200, before climbing back up again to the $8700 levels thanks to a a few quick - and lucky - buyers.

Renowned trader Peter Brandt took to Twitter to give Kraken a 'grade F-' for allowing this to happen, or even for having a part in manipulating the market. 'A job of exchanges is to provide order and liquidity. Without regulation, what keeps exchanges from manipulating prices and purging stops for its own financial benefit? No excuse for this. Kraken, public statement please.'

Brandt later added that he trades through Kraken. 'Most of you are missing my point. Cryptomaniacs do not want any regulatory oversight, yet chime the mantra 'adoption, adoption, adoption'. Institutional involvement will not develop when the wild west exists.'

One follower responded to Brandt with: 'The job of the trader is to trade where there is liquidity and not trade on an exchange known to do this and cry about it on Twitter.'

The Bitcoin flash crash to $8200 is not the biggest one we've seen in cryptocurrency in the last few years. In June 2017, Ethereum dropped from $318 to $0,10 in less than a second. In December 2018, ETH saw another flash crash from $100 to $13.05.

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Read more about: Kraken Bitcoin (BTC)

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