The cryptocurrency market for Ethereum plummeted late Wednesday. This wasn't a quick dip, but a flash crash that sent the price from $317 to a low of $0.10 in a matter of seconds.
Some people saw thousands of dollars in value disappear.
Things are back to normal, sort of. The price of ether, the cryptocurrency of the suddenly hot Ethereum platform, has since rebounded and is trading back at about $318.
The crash, however, remains as a big reminder that this is a volatile, new market. Plenty of people have made small fortunes investing in these markets, but the get-rich-quick stories belie the risks that the average person faces if they want to get in on these new digital currencies.
The vice president of GDAX, the Ethereum exchange which experienced the crash, blogged about the event, explaining that a "multimillion dollar market sell" was placed midday Wednesday. This triggered prices to fall from about $317 to $224 and 800 automatic stop loss orders to go through—those are automatic sells set for when prices hit a certain amount.
Hence some people who didn't even mean to sell ended up dumping their ether for a small percentage of what it had just been worth.
"We understand this event can be frustrating for our customers," VP Adam White wrote.
Things went down fast. The trading price of ether dropped 99 percent in a second, but then rose back up, with traders who held onto their holdings coming out just fine.
"The millions of dollars that investors lost due to forced selling of their positions will not be recovered. This incident highlights the relative immaturity of the cryptocurrency trading ecosystem," the company wrote.
While casual investors are jumping onto the Ethereum and Bitcoin markets, it's a risky place. You can bet on that.
Link to the original article: http://mashable.com/2017/06/22/ethereum-flash-crash-cryptocurrency/#EmJvUbzauOqb