Crypto-market infrastructure creaks amid volatility test

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As worries over the economic hit from the coronavirus outbreak spread from stocks, oil and bonds to cryptocurrencies late last week, bitcoin ...

LONDON: As worries over the economic hit from the coronavirus outbreak spread from stocks, oil and bonds to cryptocurrencies late last week, bitcoin crashed to its worst day in seven years. But plummeting prices weren't the only problem for investors.

As the turmoil gripped markets, New York exchange Gemini said it fell offline for less than 90 minutes. Seychelles-based BitMEX, one of the world's biggest platforms for leveraged derivatives trading, went down twice, for a total of 45 minutes.A spokeswoman for Gemini said the exchange"observed a technical issue impacting a subset of our customers."

The outages were a reminder of the fragility of key components in crypto markets, underscoring the dangers of a high-risk asset that large investors typically steer clear of. Most crypto exchanges have bolstered their capacity to deal with high volatility and volumes, and the majority of major exchanges continued operating normally late last week.

And in contrast to foreign exchange markets, in which central banks sometimes intervene, the mostly unregulated crypto sector is left to its own devices in times of unruly trading."The tech is important," said Vinokourov at BeQuant."You're inviting traditional, big firms to trade on platforms that may not be able to withstand the amount of trading.

 

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