Bitstamp, one of the world’s longest-standing crypto exchanges, has launched an investigation following the large Bitcoin (BTC) sell order that heavily impacted Bitstamp’s order book on May 17 and sent Bitcoin plummeting 20% from $7,800 to as low as $6,250 in less than 30 minutes.
2/2: We closely examine every event that causes large-scale movement in our order book and have started an immediate case investigation.
— Bitstamp (@Bitstamp) May 17, 2019
Though Bitstamp mentions in the tweet above that they closely examine every event that causes large-scale movements in their order book, there was no reported investigation for the massive Bitcoin pump on April 2.
On April 2, Bitcoin surged from below $4,200 to nearly $5,000, with an injected $10 billion into the cryptocurrency’s market cap. This was the year’s first major pump in Bitcoin, which essentially kicked off Bitcoin’s current parabolic rise in price.
Why Investigate the $250M Bitcoin Dump and Not the April 2 Pump?
According to crypto news outlet The Block, the massive sell order on Bitstamp led to the liquidation of $250 million long positions on the BitMEX margin trading exchange, which further resulted in price declines on other exchanges.
BitMEX traders with long positions got rekt from this because BitMEX uses Bitstamp’s price data for their exchange. Therefore, it’s being speculated that this was a calculated move to liquidate $250 million in long positions, and Bitstamp should launch an investigation as a result.
Shortly after the flash crash, Bitcoin’s price surged back and stabilized around $7,200 and has since fully recovered, surpassing $8,000 once again.
Why Bitstamp has not investigated the Bitcoin pump on April 2nd is yet to be known, but they are investigating the more recent dump because of the $250 million in BitMEX liquidations.
Do you think the massive sell order on Bitstamp was a calculated move of market manipulation? Let us know what you think in the comment section below.
