Crypto News

33 Cent Ethereum and $100 EOS, What’s Going On At One Crypto Exchange?

The crypto market is highly volatile and assets such as Bitcoin, Ethereum, and EOS experience wild price swings. On cryptocurrency margin trading exchanges, these wild price swings are further amplified by traders trading on up to 100x leverage.

Last night on one crypto margin trading platform, some strange behavior occurred that caused flash crashes and flash pumps across a variety of the crypto assets available for trading on the platform.

Flash Crashes and Pumps Galore at BitMax

Overnight, BitMax traders were able to load up on Ethereum at a low of 33 cents. EOS, spiked to over $100, and some lucky crypto investors were able to scoop up Bitcoin at a $1 per BTC on the USDC trading pair. Litecoin was yet another asset impacted.

While these lucky users felt like they had hit the crypto version of a jackpot, traders on the other side of the trade had sold a $10,000 asset at just a buck. Many members of the greater community that learned of the news were quick to point out that any traders using margin were completely “rekt” as a result.

Some believe that the situation is a very real risk when trading using leverage, and those affected got what they deserved. But clearly this isn’t the norm for any cryptocurrency exchange or platform, nor are traders deserving of losses at no fault of their own.

Leverage, as defined by Investopedia, as using “borrowed money” to “increase the potential return of an investment.” Margin trading platforms are very attractive to crypto traders. Using leverage crypto traders can amplify their profits – but also losses – by up to 100 times. Combining this with the 20% or more price swings that crypto-assets like Bitcoin, Ethereum, and EOS often exhibit, can both be a recipe for disaster and incredible wealth.

Risk management is critical to success, but when platforms flash crash or platform instability, there’s sometimes little traders can do to avoid getting “rekt.”

Cloudflare and Amazon Web Services to Blame for Widespread Crypto Issues

It wasn’t just BitMax that experienced issues last night, although no other platforms suffered the same flash crash and mega pump behavior.

Binance CEO Changpeng Zhao tweeted about the issues his firm was experiencing due to AWS suffering outages.

The issue stems from an outage in Amazon Web Services cloud solutions. Amazon regularly provides cloud solutions such as DNS hosting and more for a variety of websites and companies related to crypto.

Related Reading | Bitcoin to Zero: Bitcoin Price Flash Crashes 99% on BTC/CAD Trading Pair

A similar issue occurred back at the start of July with Amazon Web Services competitor Cloudflare. In this situation, Coinbase, CoinMarketCap, and more went down due to an outage at the third-party provider. It’s the service providers that are at fault, but how trading platforms responds and protect users separates the best exchanges from the bottom of the barrel.

The post 33 Cent Ethereum and $100 EOS, What’s Going On At One Crypto Exchange? appeared first on NewsBTC.

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