New Delhi: Another day, another major snafu in cryptocurrency trading.
The price of bitcoin is down nearly 87% on Binance’s US exchange Thursday morning, dropping from around $65,000 to as low as $8,200. The price did nothing like it elsewhere, and the level on Binance almost immediately returned to where it was.
“One of our institutional traders indicated to us that there was a bug in their trading algorithm that caused the sell-off,” Binance.US said in an emailed statement. “We are continuing to look into the incident, but understand from the merchant that they have now fixed their bug and appear to have resolved the issue.”
According to the Binance.US website, the drop occurred at 7:34 am New York time. Volume on the exchange at that minute was 592.8 bitcoins, which is just shy of $40 million at current current prices.
Mistakes like this happen throughout finance, for example, traders falsify the details of the trades they want, enter the wrong price or order size. A accidentally large trade, as an example, can overwhelm an exchange’s order book, leading to a quick and massive drop. The famous flash throughout the US stock market crashed back in May 2010, although equities have avoided most trouble since that era.
This is the latest in a string of recent high-profile trading problems in crypto. Synthetify, a new decentralized exchange, was forced to shut down sometime earlier this month due to poor data provided by the Pyth network, a price feed backed by some of the world’s most renowned trading and exchange firms. . Pyth once again went haywire in September, making it mistakenly appear as though bitcoin had crashed 90%.