Many investors noticed the strange and unexpected fall in Bitcoin price on September 23rd of last week. For such a new marketplace for exchanging digital assets it is not uncommon to see some form of manipulation and issues with pricing, connectivity and speed.
Yet the major move experienced last week highlights some of the unknowns of the crypto market, when an unexpected price move cannot be simply explained. Indeed experienced market participants voiced their alarm over the large number of liquidations that transpired during the flash crash, as well as the large discrepancy in spreads for Bitcoin across exchanges, futures contracts and options markets.
For a detailed explanation on what may have led to the crash and how to be prepared in the future, check out the ARCA blog and their author, Jeff Dorman, CFA.