Bitcoin has yet to recover from a flash crash which took place one week ago. Since that time, global markets have endured major volatility. Yet Bitcoin – which some Bitcoiners champion as a hedge against an empty global financial system – has trended down in the past week.
On August 18 around 5:00pm PST, a Bitcoin flash crash brought the price of the digital currency down to $162 from north of $250. The flash crash came amid much controversy regarding the block size debate. Michael Hearn and Gavin Andresen, Bitcoin programmers, have launched Bitcoin-XT, a new Bitcoin client, and wish to fork the Bitcoin community in favor of their client. While there have been criticisms, that the number of current Bitcoin transactions is programmatically limited makes such considerations importants. Here is a chart of the crash:
Bitcoin broke $162.
The price has bounced between $200-250.
In the wake of the flash crash, Bitcoin has shown enduring volatility to the downside. Institutions dealing in Bitcoin are likely taking a step back and re-assessing their positions until the Bitcoin block size debate settles decreasing demand. Bitcoin, now at $216, could trend lower. Global stock market volatility – with the DOW down 1,000 points – could bolster the case for Bitcoin, but Bitcoin does not seem to be in the right position to cater to such a market.
The Bitcoin price further decreased today upon news that Bitfinex shut down its order book. The Hong Kong exchange endured a flash crash last week and halted trading for seven hours this morning.
Zane Tackett, In a statement, Zane Tackett, Bitfinex’s director of community and product development, stated on Reddit:
“Earlier today, at 5:27 UTC, we encountered an issue with post-trade processing, upon which we decided to halt trading to ensure consistency in the order book.”