The cryptocurrency market experienced a significant upheaval on Binance earlier today, with numerous altcoins witnessing dramatic value drops of over 90%. Notably, IoTeX (IOTX) and Cosmos (ATOM) both saw their prices temporarily plunge to zero.
Arthur Hayes, co-founder of BitMEX, provided an insightful analysis of the incident. He mentioned that circulating rumors attribute the abrupt decline to automatic liquidations executed by some major centralized exchanges (CEXs), affecting collateral linked to cross-margined positions.
Arthur Hayes commented:
“Rumor has it that several altcoins experienced sharp declines due to major CEXs automatically liquidating collateral associated with cross-margin positions. Kudos to those who capitalized on the dip—such opportunities are rare.”
Industry experts point out that these sudden “flash crashes” often stem from factors like insufficient liquidity, algorithmic trading activities, and cascading liquidations of leveraged positions. Hayes’s observations imply that this particular crash was likely driven by an automated liquidation sequence rather than any deliberate manipulation or systematic failure.
*This information is not intended as investment advice.