Bitcoin suffers a “flash crash”

     Bitcoin prices have been under pressure amid the fraught dispute, with sales sparked by the controversy triggering a “flash crash” on one of the largest exchanges, bringing down prices across the cryptocurrency’s global market.

    Bitcoin recently traded around $235 — its lowest price since early June — down about 12 percent from $265 on Aug. 14. On an exchange where cryptocurrencies are bought and sold, the price of bitcoin suffered further losses. On Tuesday night, the price of a bitcoin fell all the way to $162 on Bitfinex. The drop was called a “flash crash,” but the reality is that it was not caused by some computer glitch or trade failure, but rather by a margin call.

Bitfinex offers margin trading, which allows traders to increase their leverage (as seen in some transactions, Bitcoin speculators are keen on this type of trading, and these people can easily compete fiercely with Wall Street's top players). Today, in traditional trading environments, such margin trading has a certain position limit. If the position under consideration falls below the lower limit, it will generate a sell order, and then the trader will encounter one of the most miserable interactions in history: a margin call. This means that the agent will call the trader and ask for a certain additional deposit to cover the position amount.

     In Bitcoin trading, margin calls are automatically executed. So in a normal sell-off when some positions reach their lower limits, margin calls are automatically executed; and certain sell orders are generated to raise enough funds to cover the positions (or, as we can imagine, to be liquidated in some cases). In addition, Bitfinex later stated on Weibo that because margin calls had been executed, the orders generated in the "crash" were all legitimate sell orders. Tradeblock, a data and research website, analyzed this trading pattern and concluded that such results were indeed caused by automatic margin calls.

     However, not all news in the world of Bitcoin is so dark. The day after the Bitfinex flash crash, ChangeTip, a Bitcoin startup that enables people to “tip” each other on social media, unveiled an eight-day fundraiser to coincide with World Humanitarian Day for the nonprofit Direct Relief. The goal of the campaign is to raise enough money to buy prenatal vitamins to provide to 2,000 pregnant women in Sierra Leone and Liberia.

      ChangeTip users can donate to Direct Relief via Twitter from their accounts; each mention will generate a $5 donation. ChangeTip says there will be no transaction fees, so 100% of the funds will go to the cause, and it will also do what it calls "social proof," meaning it will take photos of vitamins being delivered in Africa.

       Sierra Leone is one of the poorest countries on earth, with a poverty rate (living on $1.25 or less per person per day) of 60%, according to the United Nations. The country's infant mortality rate is 89 per 1,000. Liberia's infant mortality rate is 71 per 1,000. The United States is 6.1 and Japan is 2.3.