On March 7th, Bitcoin prices took a nosedive, falling over $1,000 in a matter of minutes. The cause of the crash is still up for debate, but there are a few leading theories.
Some believe that the crash was caused by a large sell order on the Bitfinex exchange. This theory is supported by the fact that prices on Bitfinex fell faster than on other exchanges.
However, there is no concrete evidence that a single sell order was responsible for the crash.
Another theory is that the crash was caused by Mt. Gox, one of the oldest and largest Bitcoin exchanges. Mt. Gox has been facing financial difficulties recently, and some believe that the crash was caused by Mt.
Gox selling off its Bitcoin holdings to raise cash. However, Mt. Gox has denied that it sold any Bitcoin during the crash.
Whatever the cause of the crash may have been, it highlights the volatility of Bitcoin prices. While prices have recovered somewhat since the crash, they are still far from their all-time high of over $1,100.
With such volatility, investors should be cautious when investing in Bitcoin.
The most likely cause of the Bitcoin flash crash was large sell orders on the Bitfinex exchange. However, there is no concrete evidence to support this theory. Another possibility is that Mt.
Gox sold off its Bitcoin holdings to raise cash, but this has been denied by the exchange. Whatever the cause may have been, investors should be aware of the volatility of Bitcoin prices before investing.