In an effort to pin Bitcoin’s price drop on anything other than sellers overpowering buyers, mainstream and cryptocurrency-focused media have been eager to blame Coinrail — an irrelevant and incredibly minor cryptocurrency exchange in South Korea. However, the hack of Coinrail is not to blame for the flash crash. Market manipulators and panic sellers are.
After a prolonged period of sideways trading, market makers in the cryptocurrency space decided to slice a $42 billion chunk off the total market capitalization over the weekend. Bitcoin is now down more than 50 percent on the year.
The vast majority of mainstream and cryptocurrency-focused media has pinned the collapse on the low-profile hack of Coinrail — a borderline irrelevant exchange ranked 90th by trade volume that most readers had never previously heard of.
Coinrail is not to blame. Panic sellers are.
Stephen Innes, head of Asia Pacific trading at Oanda Corp. in Singapore, agrees, telling Bloomberg:
This is ‘If it can happen to A, it can happen to B and it can happen to C,’ then people panic because someone is selling. The markets are so thinly traded, primarily by retail accounts, that these guys can get really …
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