BitMEX is conducting an investigation into an unusual trading activity that caused a flash crash and Bitcoin price drop on its platform.
Late on Monday, the price of Bitcoin against Tether’s USDT stablecoin plummeted to as low as $8,900 on BitMEX, while the largest cryptocurrency was trading well above $66,000 on other exchanges.
However, the price on BitMEX quickly rebounded, and as of 4:10 p.m. Singapore time, Bitcoin was trading at $64,284, according to a report from Bloomberg.
BitMEX Examines the Sudden Bitcoin Price Drop
In response to the incident, a spokesperson for BitMEX stated that the company has thoroughly examined the matter and discovered evidence of “aggressive selling behavior involving a very small number of accounts that exceeded expected market ranges.”
The spokesperson also reassured users that the exchange’s systems had operated normally throughout the event and that all user funds remain secure.
One user, an account named @syq, initially reported the sudden selloff and suggested that it coincided with the sale of 977 Bitcoin, equivalent to approximately $66 million.
Still ongoing. 850+ BTC, low of $8,900. pic.twitter.com/bAiPDDM9Vj
— syq (@syq) March 18, 2024
However, BitMEX’s spokesperson declined to provide further details regarding the incident.
Bitcoin has experienced a decline of around 14% from its record highs earlier this month, following a period of high demand driven by the launch of several spot ETFs in the United States on January 11.
Despite the recent drop, the cryptocurrency is still up nearly 50% since the beginning of 2024.
On Tuesday, Bitcoin faced an additional setback as it dropped by as much as 6.3% to trade at $63,140.
As of now, Bitcoin is trading at $62,674, down by more than 7% over the past day.
The leading cryptocurrency is down by more than 30% over the past week, but still up by around 20% over the past month. You can find the latest Bitcoin price predictions here.
Grayscale Sees Over $600 Million in Outflows
The recent Bitcoin dip was ostensibly triggered by a significant outflow of $643 million from the $25 billion Grayscale Bitcoin Trust (GBTC), marking its highest outflow since it transformed into an ETF on January 11.
Thanks to the massive GBTC outflow, the total spot Bitcoin ETF net flow for the day came around at negative $154.4 million.
The Grayscale Bitcoin Trust has experienced significant outflows, with Bloomberg data indicating $7.4 billion exiting over its first 31 trading days.
This trend contrasts sharply with other recently launched spot Bitcoin ETFs, which have seen net inflows.
One reason for GBTC’s notable outflows could be its higher management fee of 1.5%, compared to competitors charging less than 0.3%.
Additionally, entities like Genesis Global Holdco LLC, amidst bankruptcy, have been selling off their GBTC holdings.
Despite expectations of outflows during the fund’s potential conversion, the duration and consistency have caught observers off guard.
Though the outflow of Grayscale Bitcoin ETF dropped to nearly $22 million in late February, it has rebounded now and broken the decreasing pattern.