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Cryptocurrency ‘Ethereum’ Crash By 99.9% Of Value, Not Surprising

Ethereum And Bitcoin.BTC Keychain/Flickr

While it’s been accepted that cryptocurrency is on the rise and there’s nothing that can be done to stop it, huge crashes are still expected. On Wednesday, one of these digital currencies called Ethereum lost over 99.9 percent of its value. That may sound devastating, but for the most part, it really was not totally surprising. Even so, it did result in millions of dollars in losses.

The most notable part about this cryptocurrency crash is how fast it occurred. While trading at GDAX, one of the biggest platforms for digital currency exchanges in the business, Ethereum lost most of its value in less than a second. It has since recovered and is now standing at over $300 from a low of $0.10, but the impact of the crash shook many investors.

As to what caused the crash in the first place, it would appear that an investor sold millions of dollars of the currency, which overwhelmed the exchange. As a result, Ethereum went from $317.81 right before the crash to $224.48. Once everyone else realized what was happening, they were forced to sell if they even hoped to save their money.

Rather than this simply being the fault of GDAX, however, the crash is basically a sign of the market’s immaturity. Cryptocurrency has been unstable from the moment the industry was established and thanks to an unnatural increase in trading over the last few weeks, the market was stressed to its limits. Anyone paying attention already knew that a crash was inevitable, or at least, they would not have been surprised by it.

There are also some limitations in cryptocurrency trading in terms of crash prevention measures that keep it from attracting more investors, CNBC reports. In the stock market, for example, there are systems in place preventing brokers from selling a certain amount of money that could adversely affect trading for everyone else. Cryptocurrency just does not have that yet.

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