Bitcoin price flash crashed to $8,200 on Binance.US platform
Bitcoin price briefly crashed to $8,200 (not a typo) Wednesday on Binance.US, the American outpost of the world’s biggest crypto exchange.
The platform’s BTC/USD feed plunged nearly 90 percent from around $65,000, possibly causing liquidations to occur on a highly uncertain published price.
This was apparently an off-market quote relative to the BTC price available on other markets. However, it’s unclear if the error has resulted in severe consequences for Binance.US users.
“One of our institutional traders indicated to us that they had a bug in their trading algorithm, which appears to have caused the sell-off that was reported this morning. We are continuing to look into the event but understand from the trader that they have now fixed their bug and that the issue appears to have been resolved,” the spokesperson said, declined to comment on further details about the crash,” a Binance.US spokesperson told CoinDesk.
While split-second crashes may be started by humans, cryptocurrency market structure means mistakes are more likely to snowball rapidly. Concerns that crypto exchanges have become more susceptible to flash crashes, a term applied when an asset price briefly surges or plunges for no obvious reason, have grown due to the rise in trading computerization.
Crypto flash crashes also exposed systemic issues under the surface of the nascent ecosystem, which exacerbates episodes of volatility when combined with leverage offered by many platforms.
Earlier in September, users of Pyth Network, an oracle platform that provides verifiable market data to sophisticated DeFi applications, were rattled after an unknown error caused more than 90 percent plunge in Bitcoin price.
The possible “fat finger” mistake showed the Pyth briefly reported Bitcoin’s price as $5,402 at a time when the primary cryptocurrency was trading at around $42,000 per unit elsewhere.
Binance CEO Changpeng Zhao said last month that depending on business growth, Binance.US is eyeing a potential IPO route to go public within three years. CZ told tech publication The Information that Coinbase, which became the first crypto exchange to go public, helped set up a playbook for crypto firms to do IPOs.
Although the company generated $800 million–$1 billion in profit last year, Binance.US is looking at a proper way to get VC money. Namely, CZ expects the US affiliate to close a large private funding round within the next two months in a bid to reduce its dependence on the global parent entity.