Yesterday (October 7), the platform coin $BGB of the well-known cryptocurrency exchange Bitget suddenly crashed without warning at around 11:00 Taiwan time, and instantly dropped by nearly 53.20%, from $1.14 to $0.5334. More than half of its value evaporated in just a few minutes.
The sudden plunge of $BGB caught many investors off guard. A large number of long contracts and lending users were liquidated and suffered heavy losses. As the news quickly spread in the community, Bitget officials responded quickly, saying that they were actively investigating the cause of the incident and promised to provide feedback to users immediately after the cause was clarified.
What’s the reason for the $BGB crash?
The Bitget exchange has not yet announced the specific reasons for the plunge, but based on past experience, such drastic fluctuations may be due to the following factors:
Large investors selling: Some analysts pointed out that it may be that a large investor holding a large amount of $BGB suddenly sold out, causing the market liquidity to dry up instantly, thus triggering a price crash.
System failure or technical loophole: In the past, there have been many cryptocurrency exchanges that have experienced abnormal fluctuations in token prices on the platform due to system errors, technical failures or algorithm loopholes.
Market attack: Some people also speculate that there may be market makers who have attacked the price of $BGB. This kind of situation often occurs in some small currencies with low liquidity.
The above factors are all speculations, and the specific reasons are yet to be announced by Bitget officials.
After the incident, Bitget Exchange issued an announcement emphasizing that it would "fully compensate" users who were harmed by the volatility, and promised to announce a specific compensation plan within 24 hours and complete the compensation within 72 hours.
The happiest people in the whole incident are the users who successfully bought the bottom at the moment. This is because after the price of $BGB flash crashed to 0.5334, the Bitget exchange quickly stepped in to protect the market, and after investors confirmed that there was no accident on the platform, market sentiment began to reverse.
According to data from the Bitget exchange, $BGB rebounded quickly within just half an hour after the flash crash, not only making up for all losses, but even rising by more than 100% at one point, rebounding to $1.18, setting a new high since August.
This wave of rebound has doubled the assets of investors who bought at the bottom. The community has been filled with voices saying “you missed the opportunity to make money”, with many users jokingly saying, “I hope it falls again.”
However, some investors believe that the speed and transparency of Bitget Exchange’s official response to the incident remains to be seen, especially how the promised “full compensation” will define losses and the scope of full compensation. The official has not yet made specific details.
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