Hi folks.
Just sharing this interesting views of a poster on reddit:
The cause of today's chaos is likely large hedge funds using expiring BTC futures contracts as safety nets to exploit the only sure-thing in this market: a large amount of new/overextended investors who are easily moved to panic sell during a flash-crash.
It is likely that such drop is clearly caused by manipulation indeed, I find this theory interesting.
One can also notice that every year since 2015 there is always a drop in January and this may be also due to Chinese new year. This is also possible but I don't believe small holders will cause such drop, so the hedge funds theory is more likely.
You can read more here >
theory on the real cause of today's chaosRemember that with these futures contracts, if someone is going short, the other party to the contract is going long.
Sure the shorters have an incentive to try to tank the underlying market in bitcoin. But their counterparties have an equal incentive to prevent the underlying market from dropping...