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Bitcoin Sold For $1 in August 2019

Discussion in 'General Discussion' started by JVanL, Sep 13, 2019 at 8:36 AM.

  1. JVanL

    JVanL Contributor

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    In a piece of reality that looks like a huge joke, it is on record that Bitcoin sold for $1 in August 2019 on certain exchanges in the Asian region. The news of this development broke on 23 August 2019 when some of the major exchanges within the region reported a malfunction within their systems.

    Apparently, the Amazon Web Services (AWS) network experienced an outage which affected those platforms that were connected to it. Some of the exchanges that were affected include Binance, KuCoin and BitMax.

    On the said day, the CEO of Binance, Changpeng Zhao (CZ) announced through Twitter that his exchange was experiencing some difficulties.

    CZ tweeted:
    “AWS is having an issue, mostly with caching services, affecting some users globally. We are working with them and monitoring the situation closely.”

    During the malfunction, deposits and withdrawals were disabled on the Binanceplatform. Many replies followed the tweet from CZ with some of them expressing panic. He however continued to reassure his followers until the issue was eventually resolved. From his responses, it was clearly an issue with Amazon’s AWS, which he remained in contact with until it was resolved.

    Some traders who played what looked like a wild card took advantage of the situation to buy Bitcoin for less than $1 during the outage. This was reported to have happened on BitMax exchange. Reports claim that these traders had set limit orders at extremely low prices. The hope of these traders was on some off-chance event like what just happened.

    According to information that spread on social media, as much as 45 Bitcoins were purchased at sub $1levels during this period on BitMax. The exchange announced immediate freezing of deposits and withdrawals shortly afterwards. Although it did not confirm that the said transactions had occurred. It’s safe to say that

    BitMax will never forget the day that Bitcoin sold for $1 in August 2019.

    Another exchange that wasn’t spared during this outage is KuCoin. The exchange also disabled part of its services and posted a notice on its website, which read:

    “Due to the overheating of part of our chassis in the machine room we deployed in AWS, Tokyo, part of our services might become unavailable. The engineering operation team is currently deploying relevant resources of high availability across regions to deal with any possible emergencies that might happen. Some services might be affected during the deployment.”

    The purchase of cheap Bitcoins was confirmed by the founding partner at crypto asset fund Primitive

    Ventures, operators of KuCoin, Dovey Wan who tweeted:

    “Many Asian exchanges see price instability (and trades were able to execute, yes you can buy extremely cheap Bitcoin if you had limit orders there).”

    Beyond the three exchanges mentioned so far, several other exchanges within the same region seemed to have encountered the same problem.

    The Bitcoin price, which appeared to be finding stability above the $10,000 region seems to have struggled a bit since this development. Although Amazon has resolved the issue and the exchanges have returned to normal services, the Bitcoin price is still struggling below $10,000 (at the time of writing).

    Issues like this are some of the limitations that confront centralized exchanges as we have them today. This is where peer-to-peer platforms like Vertex.Market have the upper hand. Risks such as the AWS issue are completely eliminated because trading is not based on an order book that is hosted on a third party platform.

    Although all of us will remember the day that Bitcoin sold for $1 in August 2019, not everyone will remember it with regrets.
     

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