In a shocking crash, the price of OKB plummeted by over 50% in just 15 minutes, resulting in a loss of $6.5 billion in market capitalization. The drop occurred on January 23rd, with the token falling from $52.02 to $25.10 on OKX exchange before quickly recovering.
OKB Price Crash Caused by Snowball Effect
The crash was triggered by the liquidation of large leveraged positions after OKB reached $48.36, according to OKX’s Twitter statement. This led to further liquidations of pledged loans, leverage trades, and cross-currency transactions, causing a major sell-off.
Today, OKB experienced unexpected volatility. The market has quickly stabilized, and we’re actively developing a compensation plan, set to be finalized within 72 hours.
We apologize for any inconvenience caused and are committed to enhancing our risk management protocols.… pic.twitter.com/GxJ2M0dOS3
— OKX (@okx) January 23, 2024
OKX has pledged to fully compensate users for additional losses caused by abnormal liquidation and will announce the details of reimbursement within 72 hours.
Bitcoin ETF Launch Fails To Stop the Fall
The OKB flash crash occurred during a period of high volatility in the crypto market, largely due to Grayscale Bitcoin Trust’s continuous sale of Bitcoin to meet redemption demands. Additionally, FTX exchange sold nearly $1 billion in GBTC shares, putting pressure on Bitcoin’s price after the launch of Bitcoin ETFs on January 11.
OKX has been focusing on regulatory compliance and recently delisted privacy coins like Monero and Zcash. The exchange also introduced risk assessment questionnaires for UK users to comply with FCA prerequisites.
The OKB crash highlights the vulnerabilities in the crypto industry following the launch of Bitcoin ETFs. Traders are waiting for OKX’s compensation plan to address the sudden loss of market value.
Hot Take: OKB Flash Crash Raises Concerns About Crypto Market Stability
The recent flash crash of OKB on OKX exchange has shaken the crypto market, raising questions about its stability. Within minutes, billions of dollars in market value were wiped out before a quick recovery. The crash was triggered by successive liquidations of leveraged positions, which led to further sell-offs. OKX has promised to reimburse affected traders for their losses.
This incident comes at a time when the crypto market is already experiencing volatility due to factors such as Grayscale Bitcoin Trust’s sale of Bitcoin and FTX’s offloading of GBTC shares. It also highlights the increasing regulatory scrutiny faced by crypto exchanges like OKX.
Traders are now anxiously awaiting OKX’s compensation plan and hoping for more stability in the crypto market moving forward.
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