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RE: Ethereum Flash Crash - $317 to $0.1 on GDAX - Programmer explains

in #ethereum7 years ago

YOU ARE MISSING THE POINT! The first question to ask is why someone would sell so much so quickly? This is a direct effect of FIAT currency. What has happened here is someone borrowed money that they needed to pay back at a certain time, most likely at the end of the month. You could probably find a time were the same amount of volume bought ETH at the beginning of the month. This will most likely happen again and it could happen in any trading platform, with people converting FIAT currency into CRYPTO. I don't think it's a good idea for these trading platforms to implement things like circuit breakers because it will make the costs of trading go up. What people should do is place alerts on their phones and emails, they should stop using automated stop losses in these kind of environments. When you make a trade you should be the one making the decision, not allowing a computer to just react to one single perimeter, maybe more advanced stop losses could be created to place conditions on flash crash proofing, but the real solution here is that people should pull their crypto and place it into their wallets in a safe place.