Cryptocurrency Market Decline

The cryptocurrency market was shaken by sharp declines on Binance early this morning. Many altcoins briefly lost over 90% of their value. IoTeX (IOTX), in particular, briefly dropped to $0, while Cosmos (ATOM) similarly plummeted to zero.

BitMEX co-founder Arthur Hayes offered a critical assessment of the crash. He stated that market rumors suggest that the sudden drop was triggered by the automatic liquidation of collateral tied to cross-margined positions by some major centralized exchanges (CEX).

Arthur Hayes made the following statement:
> “Word on the street is that many altcoins fell sharply as major CEXs automatically liquidated collateral tied to cross margin positions. Congrats to those who bought on the dip; we won’t see these levels again for a long time.”

According to experts, such sudden “flash crashes” are typically caused by a lack of liquidity, algorithmic trading, and the chain liquidation of leveraged positions. Hayes’s statements suggest that this market crash may have been caused by an automated liquidation chain rather than a systematic error or manipulation.

*This is not investment advice.