Using the exchange is one of the easiest ways to buy and sell Bitcoin. However, some users are luckier than others.
Thursday morning was an excellent day for Binance users, as Bitcoin suddenly plunged by about 87%, sinking to the price of $8,200, only to instantly snap back to $65,000.
Bitcoin did nothing similar in other exchanges, and according to Binance, this was a bug in the trading algorithm. The plunge happened at 7:34 AM New York time, and the volume on the exchange was 592.8 BTC, which was worth about $40 million.
The bug was reported by an institutional investor. Binance US is still looking into this event, although the issues are resolved.
The cryptocurrency market often sees these problems. Sometimes they happen because of a bug or simply because of a trader’s mistake. Traders can mess up their orders, enter the wrong details, or set the wrong price for large orders.
Orders of this magnitude can additionally overwhelm the exchange’s order book and bring in a massive decline. For example, Synthetify, a new DEX, recently had to shut down because of bad data issues.
At the moment, Bitcoin is back on its regular course, trading for about $63,600.