3 ms·
>That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. It was only the market on a s
by logicchains 7y ago
>That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market.
It was only the market on a single exchange, Bitstamp, which is extremelly illiquid compared to the largest exchanges. The problem was that Bitmex, a much more liquid exchange, bases the settlement price of its popular perpetual Bitcoin swap on an index of just two exchanges, Bitstamp and one other, so manipulating the price on illiquid Bitstamp also screws with the price on liquid Bitmex.
- davidgerard 7y agoCoinbase's isn't much deeper. The real problem is that the exchanges all have separate order books, and it's hard to arbitrage between them. This is a recipe for volatility.
- village-idiot 7y agoI agree that Bitmex basing its settlement price on two less liquid exchanges is a bad thing. Personally given the number of margin traders being force liquidated, I suspect that BitMEX likes the lack of liquidity. However, if the issue was only a thin market on Bitstamp, the price fluctuations would have remained localized to Bitstamp and the futures market on Bitmex. But instead the price for bitcoin dropped by about $1k across the board, which to me signals thin markets everywhere.