Bitcoin ‘flash crash’ drives price to $7,750 on Deribit

Bitcoin experienced a major ‘flash crash’ on derivatives exchange Deribit last night, with price sliding all the way down to $7,750 in a matter of seconds.

The incident was caused by a malfunction of Deribit’s Bitcoin index calculation, which ultimately caused a 15% drop in the price of Bitcoin on the perpetual swap contract.

The dramatic swing in price resulted in a massive amount of “erroneous liquidations”, although Deribit has now reimbursed all affected accounts with a total of 150 BTC ($1.37 million).

Deribit updated its website with the following statement: “Deribit encountered BTC index calculation data issues around 21:00:00 UTC on October 31, 2019.

“This has caused our liquidation engine to initiate erroneous liquidations.

“Trades will not be rolled back. Please manage your positions accordingly.

Deribit

“The cause of this incident was one platform providing incorrect prices that should have been removed as an outlier in the index calculation. We have suspended this platform from the index calculation.

“Our sincerest apologies for all inconvenience.”

Coinbase Pro was also affected by the malfunctioning Bitcoin index as price dropped from $9,260 to $9,055, prompting the exchange to go offline for one hour.

The incident marks another moment in a difficult 24 hours for cryptocurrency exchanges in light of BitMEX’s dilemma, with the world’s most popular cryptocurrency derivative trading platform accidentally leaking thousands of customer email addresses this morning.

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The post Bitcoin ‘flash crash’ drives price to $7,750 on Deribit appeared first on Coin Rivet.

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