GDAX Will Absorb Investor Losses From Recent ETH Flash Crash

There was a major flash crash on Wednesday - on the trading platform GDAX which wiped 29.4% of ETH value from the market. As well as automated selling of any margin account with ETH as it continued to fall apart.

The key here is that investment platforms as still new and don't hold enough liquidity to handle large exit orders on their system. At one point some whale decide to exit their entire ETH position on GDAX dropping prices down to $0.10 for a split second. Which means on the flip side someone bought ETH at $0.10 on Wednesday during this crash - making instantly thousands if not hundreds of thousands of dollars.

The good news out of all this, is that the trading platforms are finally acting like real companies who are thinking about the long term. They decided to reimburse any losses suffered during this flash crash since it was a system issue - this should that exchanges are serious about keeping things on the up and up. They are also signaling they don't want to burn their customer base or have people fleeing to other exchange because of these issues.

In order to keep customers happy and exchange volumes moving up - this was the right thing to do. Glad to see some maturity in our new born industry, it's definitely a good sign.