Every crypto investor’s worst nightmare came true for one Brazilian trader, who accidentally bought bitcoin at a massive premium.
At one point, he bought 0.0047 BTC for 340 Brazilian reals, worth about $91. At press time, said amount of bitcoin is worth less than $15 on other exchanges, meaning at the rate he paid for a full bitcoin would’ve cost him the equivalent of over $19,400.
According to local news outlet Portal do Bitcoin, a potential explanation for what happened was the trader placed a large market order, which “cleaned” the platform’s thinly-traded order book. | Source: Portal do Bitcoin
The cryptocurrency trader placed his buy order on a local exchange called TemBTC, which isn’t among the largest platforms in Brazil. According to local news outlet Portal do Bitcoin, a potential explanation for what happened was the trader placed a large market order, which “cleaned” the platform’s thinly-traded order book. Available records show some bitcoin was also bought for $16,000, $13,000, and $10,000 before reaching the $19,000 peak.
Speaking to the news outlet, TemBTC’s founder Renato Abreu noted the order likely came from “someone with little knowledge who issued a [large] market order.” The episode saw the trader pay a price above that of bitcoin’s all-time high on Brazilian exchanges, which was of $18,900 in December of 2017.
The trader’s nightmarish buy comes as the crypto market seemingly starts moving out of a year-long bear market that has seen bitcoin’s price tank from an over $19,000 all-time high to a low of about $3,200 before recovering to around $3,575.
Although the bear market has taken its toll, seeing traders issue large buy orders can always be seen as positive. In the past, we’ve seen exchanges’ order books collapse over large sell orders, so in the next few months the trend could change.
The cryptocurrency exchange was notably recently been acquired by a group that controls other cryptocurrency-related platforms in Brazil. After the acquisition, its trading volume surged 10,000%, from little over 1 BTC per day to over 100.
At one point, TemBTC’s daily trading volume reportedly hit 2,000 BTC. Per Abreu, the exchange’s skyrocketing volume is related to the “registration of large players on TemBTC.” Whether we will see Brazil lead the way in the crypto space remain to be seen.
BITCOIN’S GROWING RELEVANCE IN BRAZIL
Interestingly, the cryptocurrency scene’s relevance has been growing rapidly in the South American nation. As CCN reported, a local supermarket chain called Oasis Supermercados recently started accepting cryptocurrency payments, and Brazilian exchanges have won standoffs against banks.
The country’s new president, Jair Bolsonaro, recently shut down an “indigenous” cryptocurrency” project that would have brought in a dubious “alternative currency for the natives, which could transform the reality of these people.”