The crypto market appears to be running into troubles as of late, after bitcoin was sent tumbling by as much as 87% on Binance’s US exchange, before quickly regaining all losses.
According go Bloomberg, at exactly 7:34am ET Thursday morning, bitcoin crashed from around $65,000 to a low of $8,200, before quickly reverting to its initial position. The sudden phenomenon was only observed on Binance’s US exchange, and despite immediately snapping back to above $65,000, it was enough to dampen momentum and send bitcoin prices 5% lower.
“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,” explained Binance.US in an emailed statement to Bloomberg. “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.”
According to Binance, when the “fat finger” trade occurred, volume sat at around 592.8 bitcoins, which translates to approximately $40 million at current prices. As Bloomberg notes, such phenomenons occasionally occur in financial markets when traders make errors in their trades, such as submitting incorrect order sizes or prices.
Although that is certainly true, the money question is whether or not the ‘fat finger” occurred on purpose, perhaps with the intention of reversing bitcoin’s upwards momentum even at the cost of taking on an extensive loss.
Information for this briefing was found via Binance and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.