Bitcoin, which reached record highs just last month, seems to have suffered a precipitous decline, falling by $600 in a couple of minutes this morning. The cryptocurrency had reached a high of $4,867 yesterday but was trading at $4,200 this morning on the Coindesk Bitcoin Price Index, according to a CNBC article. As of this writing, it was trading at $4,870.86 on the same index. However, the index records a price of $4,765 as bitcoin's lowest price within the past 24 hours. In addition, the accompanying chart provides no indication of the fall. The fall in bitcoin's price was also not recorded on any of the indexes that comprise the Coinbase index.
The CNBC article mentions Russia's announcement of a ban on bitcoin exchanges as a possible reason for the flash crash. At a press conference, the deputy governor of Russia's central bank Sergey Shvetsov said that the bank and government prosecutors were working to ban access to sites that enable bitcoin trading. "It's obvious that when a pyramid (scheme) grows, interest in this pyramid heats up with the high rate of return," he said. (See also: Russia Turns Cold on Cryptocurrencies.)
While Russia's decision to ban bitcoin is a plausible reason for a fall in the cryptocurrency's price, the extent and severity of today's supposed crash might be a stretch. This is because Russian officials have mostly had a negative assessment of the currency – hence, their statement today was no surprise. (See also: Russian Cryptocurrency Adoption Is Slower Than You'd Think.)
Meanwhile, commentators are comparing bitcoin's fall to a similar ethereum flash crash that occurred last June. Then, the price of ethereum, the world's second largest traded cryptocurrency, crashed from around $317 to as low as a dime within a single day on the GDAX exchange. The exchange's vice president Adam White said that a "multi-million dollar market sell" order had a cascading effect on stop-loss orders and resulted in a shortage of margins on the order books. The CFTC suspended its margin trading services following the incident and is currently investigating reasons for the crash. (See also: GDAX to Pay Back Customers After Ethereum Flash Crash.)