The price of Ethereum has fallen from $100 to $13 on Coinbase Pro

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The price of Ethereum has suffered a flash crash, falling from $100 to $13 in a matter of seconds. The flash crash happened on Coinbase Pro exchange (formerly known as the GDAX).

The price returned to normal shortly after it fell, as arbitrage makers lifted the price back to $100. It appears the anomaly only affected the ETH/USDC trading pair (USDC is a new stable coin based on the US dollar and created by Circle).

Many traders reported the situation on social media. While the majority were perplexed by the whole situation and just wanted answers, some lucky traders took the opportunity to brag about their newly acquired Ether.

This isn’t the first time something like this happened. Last year, Ethereum also experienced a flash crash on Coinbase Pro. That time, the cryptocurrency’s price plummeted from $319 to $0.10 in a few seconds and traders were eventually refunded for their losses. Here is a video of the flash crash happening live.

That incident saw Coinbase’s platform, then known as GDAX, stop offering margin trading as the crash was partly feueled by margin positions getting liquidated. Behind the crash was a multi-million dollar sell order.

What Caused The Flash Crash?

Coinbase has since released a statement on Twitter addressing the issue:

It seems that, according to Coinbase, the unusual trading activity was not caused by a system failure. If that is the case, the speculated cause for the flash crash was a manually placed sell order.

It is possible that the massive sell order was caused by an initial coin offering (ICO) cashing out its ether funds, or that it was unintended, as it might have been a crypto whale trying to cash out quickly. Either way, if the flash crash is proven to have been triggered by traders, then Coinbase most likely won’t be issuing any refunds this time.

After falling bellow $100 yesterday, Ethereum is currently being traded at $86.11 and is down 12.02% over the last 24 hours, according to data from CryptoCompare.

Although most weren’t affected by the flash crash, it brings back memories of a recent episode from crypto exchange Bitstamp, in which a bot “went wild” and saw the price of various cryptocurrencies swing wildly.

Bottom line, this is still a nascent industry where some of the things we’re protected against in traditional markets haven’t yet been properly implemented just yet. To stay safe a lot is needed and, as such, understanding exactly what we’re dealing with is important.

As CryptoGlobe covered, cryptocurrency exchange Bithumb reached the number one spot by trading volume without having the highest number of users through “incentivized trading.” On some of its trading pairs the volume quickly disappeared.

While Coinbase and Bitstamp appear to be trustworthy exchanges, they still suffer from time to time. The best way to keep your funds safe is to withdraw them from these platform when you aren’t using them, so you can control the private keys of the wallets they’re in yourself.

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