BitStamp, one of the oldest crypto exchanges, had to halt trading following a chaos caused by one of their client’s trading bots.
Nejc Kodrič, the co-founder of the platform, explained that trading had to be suspended as certain crosses involving EUR currency went haywire or about 23 around minutes. According to him, the bot belongs to one of their clients.
The chaos started at 1:12 AM British time, once around €6 million-worth of BitCoin were sold, ultimately pushing the price below €5,000 (Graph 1).
Graph 1. Bitcoin (BTCEUR) 5min chart
The first round of selling ended after approximately 15 minutes when the price rotated back higher as the same amount of BitCoin was bought back. This swing pushed the price from €4,945 to €6,652 in just a couple of minutes. Finally, the price action calmed down once 1.3 million-worth of BitCoin were sold, bringing the price back to the same zone before it all went wild.
Graph 2 shows a similar action in ETHEUR, while similar patterns were noticed also in XRPEUR, LTCEUR etc.
Graph 2. Ethereum (ETHEUR) 5min chart
It is difficult to judge what is behind these actions, but the most probable conclusion is that the bot simply went rogue for a certain period of time. A “fat-finger error”, an error whereby an order to buy or sell an asset is placed of far greater size than intended is also a possibility.
It is also important to note that the other exchanges did not replicate the chaos that occurred in the BitStamp exchange.
BitStamp is one of the oldest exchanges that has seen steep declines while exchanges such as Binance, Huobi or BitHumb have seen their daily traded volume skyrocket.