By 9:00 p.m. that night, it had drastically recovered back up to $2,721.
At the same time this drop was occurring, two major bitcoin exchanges: Coinbase and BTC-e, who account for 23% of the bitcoin market, also went offline, preventing investors from being able to manage their currency.
Coinbase cited high customer traffic and trading volume for being “down for maintenance.” They claimed that the issue was resolved by 7:44 p.m. EST; basically after all of the damage was done and bitcoin had begun to recover.
Simultaneously, a new blockchain-based project, known as Bancor, was introduced, absorbing mostly ethereum and bitcoin to create a new currency, known as bancor network tokens (BNTs).
Throughout the day, while major exchanges were mostly offline, it raised $150 million, setting an industry record for an initial coin offering (ICO).
Bancor was then forced to extend their ICO by three hours, due to“overwhelming demand and traffic, and massive malicious attacks,” according to a blog post from the company.
How generous of them. So basically, once bitcoin and ethereum lost their maximum value, you were allowed back online to strategize your trades.
The way I see it, this is how it went down:
Massive amounts of bitcoin and ethereum were transitioned into a new cryptocurrency known as Bancor. As the values of the first two drop, the new one rises, so in a sense, none of those initial investors really lost any wealth.
They profited massively after the transition of wealth from two currencies into a new one.
We (the average guys) on the other hand were prevented from taking place in this transition of wealth. Once they had established a new currency, once their wealth had stabilized, we were allowed back in to buy up a bits and pieces of devalued ethereum and bitcoin
We lose money, these large investors do not. They in fact, position themselves to make a quick profit, virtually in one day.
It turns out, the exact same scenario played out 3 weeks earlier on May 25, in which bitcoin drops more than $400 in value, while cryptocurrency exchanges such as Coinbase went offline, preventing investors from taking action.
Simultaneously, a new blockchain project, known as CryptoPing, launches a crowdsale.
“Behind the project is a group of successful cryptocurrency traders with 5+ years of experience who prefer to remain anonymous … 9,000,000 tokens based on Waves platform are to be issued for the crowdsale with total worth of 1000 BTC. Additional 1,000,000 tokens will be reserved for one-level 10% referral program.”
Once again, a transition of wealth, from bitcoin and ethereum into CryptoPing tokens, occured. Once wealth had stabilized, everyone else was allowed in.
They moved their wealth over, then we, who had lost value, attempted to move in and feast on the scraps. But thousands of people actually lost substantial sums of money because, again, Coinbase went offline during a downturn.
It raised $5.5 million USD in ethereum in a matter of minutes.
Google Coinbase on that date, this is the top return:
Coinbase Status – Incident History
Glidera is able to perform fiat-to-Bitcoin ACH transfers, or basically what banks do: trading with money they do not actually have; creating money out of thin air.