LeapRate Exclusive… LeapRate has learned that technical problems leading to a number of trading outages on some of the more popular Bitcoin exchange platforms are what led to a mini flash-crash and recovery in Bitcoin prices over the past 36 hours.
Bitcoin prices, declining steadily this summer from the $275 range down to the $225 level, held fairly steady over the past week including most of Monday even as equity, commodity and Forex markets saw huge swings.
But that ended late Monday, when something triggered a ‘flash-crash’ sending Bitcoin prices down more than to about $200 – even being quoted in the $160s on some less liquid platforms – before prices bounced back to the $220-225 level, where they sit now.
After discussing the issue with a number of traders and industry participants, LeapRate has learned that the likely culprit were outages at some of the leading Bitcoin exchanges, including industry leader Bitfinex.
It seems as though the Bitcoin market, still in its early growth phase, sees a different leader emerge every 6-9 months or so. Early on it was the now-bankrupt Mt Gox, followed by others such as Bitstamp and more recently Bitfinex. Bitfinex bills itself as the ‘largest and most advanced crypto-currencies trading platform‘, although it also admits that it is ‘currently in a beta phase (testing phase)‘. The platform is owned and operated by iFinex Inc. (BVI), and is operated out of Hong Kong.
Bitcoin news service Coindesk reported that Bitfinex halted trading Monday for a seven-hour period, one of several recent but shorter outages we have learned.
In a statement on Reddit, Bitfinex’s director of community and product development Zane Tackett stated ‘Earlier today, at 5:27 UTC, we encountered an issue with post-trade processing, upon which we decided to halt trading to ensure consistency in the order book.’
Apparently Bitfinex’s issues lie in part with the integration of a new software platform, provided by AlphaPoint Software.
And it looks like the cycle of Bitcoin traders continuing to migrate to different platforms as problems hit existing platforms will continue. Those looking to trade Bitcoin anonymously are looking to platforms such as OKCoin. In the US, they’re looking to Coinsetter (which allows traders to use leverage in Bitcoin trading) and ItBit.
According to Coinsetter CEO Jaron Lukasiewicz,
We are seeing a shift in where bitcoin trading takes place towards exchanges with more robust technology.