on AUGUST 20, 2014
Margin Trading Was The Cause?
Margin calls is an element of margin trading. A margin trader can deposit funds in a specified account with a related business – in this scenario, digital currency exchanges. Or specifically some have mentioned Bitfinex.
Once a margin trader has deposited her or his funds they receive percent of it back as credit. For example, you deposit $5,000 in Bitcoin and you would have your account credited the $5,000 and then another $5,000 (in a chosen denomination).
This credit would allow you (as a margin trader) to place bigger sell and buy orders than you normally would, creating liquidity on an exchange and attract more customers.