On February 13, 2020, XRP experienced a dramatic flash crash on the Bitmex exchange. The price plunged from $0.32 to $0.14 within a single candlestick — a drop of 56% — wiping out heavily leveraged long positions. The event triggered an outcry among traders, who accused the platform of enabling a 'scam wick' that bypassed stop-loss orders.
Liquidated Traders Cry Foul
Trader Marc de Koning tweeted: “WTF — This is really not okay — My stop didn’t trigger and my entire Bitmex account is […] gone.” His experience was echoed by many others who claimed that their stop-loss orders failed to fill as the price fell below liquidation levels. Blockchain analytics firm Fiatleak suffered overload from the surge in XRP enthusiasts checking the chart, noting: “The site is wobbling and staggering under the combined weight of many, many thousands of XRP fanatics watching a technical breakout.”
Popular analyst Jacob Canfield commented to his 48,000 followers: “XRP traded from $.34 to $.14 in one candle on Bitmex. My mama told me that’s the devils coin and I’m starting to believe her.” Crypto trader Benjamin Blunts called the move “disgraceful” and said he would never trade XRP perps on Bitmex again, urging CEO Arthur Hayes to “dig into the insurance fund to compensate the people who’s stops didn’t go off otherwise, that’s a dog act.”
Liquidity or Manipulation? The Debate Continues
Many traders pointed to XRP’s notoriously shallow liquidity as a key factor. Silvia Gutierrez noted: “XRP is well known for been a crypto that always [screws] its holders and Bitmex well known for making those moves to liquidate accounts, so…” This is not the first such crash for XRP; similar flash crashes occurred on Bitfinex two years prior and on Bitstamp one year ago.
Adding to the controversy, Arthur Hayes’ tweet from the day before resurfaced. He posted a chart of XRP/USD with the caption “Cripple the shorts” and added: “Pro Tip: the Buy and Sell buttons are both equally profitable regardless of whether or not you are trading a turd.” Critics called the remarks unprofessional and damaging to Bitmex’s reputation. One user responded: “The statements you make reflect negatively on Bitmex. Very unprofessional/childlike.”
At the time of writing, Bitmex had not issued an official statement regarding the incident. The flash crash serves as a stark reminder of the risks involved in trading illiquid altcoins with high leverage on derivatives platforms that can exhibit extreme price behavior.