Bitcoin’s record-setting run took another unprecedented turn on Thursday, as the bitcoin price ripped past $19,000 on cryptocurrency exchange GDAX, leaving a trail of altcoin carnage in its wake. However, the rally was characterized by unusual trading activity, including one of the largest BTC/USD spreads in recent memory.
The breathtaking climb saw bitcoin rise more than $5,000 in a span of 12 hours. The journey from $17,000 to $18,000 took just fifteen minutes, and the leap from $18,000 to $19,000 was accomplished in five. By 11:30 a.m. ET — the end of the surge — the bitcoin price had reached $19,697 and was threatening to crack $20,000.
This ascent left many people puzzled because it was not replicated on other prominent bitcoin exchanges. Bitstamp, for instance, peaked at $15,995, while Bitfinex only made it to $15,700. Spreads between bitcoin exchanges are expected, but this is undoubtedly the largest percentage BTC/USD spread that bitcoin has seen in recent memory.
The spread was so drastic that GDAX traders were paying just $100 less than traders on Korea-based Bithumb, which regularly prices bitcoin at a 20 percent premium over the global average.
Immediately after reaching $19,000, the bitcoin price began to plunge, and by 11:55 it had careened down to $15,100. Three minutes later, at 11:58, GDAX effectively went down, moving all markets into “Post-Only” mode, meaning that traders could place limit orders but could not execute any trades. Bitcoin remained frozen at $16,299.
Some observers began to wonder aloud whether GDAX’s system had encountered an error or had been breached by a hacker, but the exchange resumed trading at approximately 12:25 p.m. and the bitcoin price began to recover from the dip that occurred just prior to the outage.
At the time of writing, bitcoin was trading at $16,889 on GDAX — a full $2,000 above its price on Bitfinex. The global average, meanwhile, was $16,096, providing bitcoin with a market cap of $269 billion.
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Last modified: March 4, 2021 5:02 PM