New Delhi: Another day, another major snafu in cryptocurrency trading.
The price of Bitcoin quickly plunged about 87% on the Binance U.S. Stock Exchange Thursday morning, falling to $ 8,200 from around $ 65,000. The price did nothing of the sort on other sites, and on Binance the level almost immediately returned to its original level.
âOne of our institutional traders told us he had a bug in his trading algorithm, which appears to have caused the sell-off,â Binance.US said in an emailed statement. “We are continuing to investigate the event, but understand from the trader that he has now fixed his bug and the issue appears to have been resolved.”
The plunge happened at 7:34 a.m. New York time, according to the Binance.US website. The trade volume at this minute was 592.8 Bitcoin, which is worth just under $ 40 million at current going prices.
Mistakes like this happen across finance when, for example, traders mess up their planned transaction details, entering the wrong price or order size. Too large a trade, for example, can overwhelm an exchange’s order book, leading to a rapid and massive drop. The entire US stock market collapsed in May 2010, although stocks have mostly avoided problems since that time.
This is the latest in a series of recent high profile crypto trading issues. Synthetify, a new decentralized exchange, was forced to close earlier this month shortly after its debut due to bad data provided by the Pyth Network, a price feed backed by some of the trading companies and d most famous exchange in the world. Pyth malfunctioned again in September, mistakenly giving the impression that Bitcoin had crashed 90%.