Bitcoin's Price Crashed 87% On Binance.US Thanks To a Bug

An anonymous reader quotes a report from Motherboard: Bitcoin is on a tear, reaching an all time high price of $67,000 for 1 BTC on Wednesday, buoyed by a series of approvals for Bitcoin futures funds on the stock market. But on one major U.S. exchange, the price flash-crashed 87 percent to roughly $8,200 on Thursday due to a bug in a trading algorithm. The crash occurred during a massive sell-off on the Binance.US exchange that occurred around 7:42 a.m. ET, Bloomberg reported. Binance is the largest cryptocurrency exchange in the world, and its Binance.US exchange is meant to be compliant with U.S. regulations, although it is still banned in several states.

According to a Binance.US spokesperson, the crash was due to an issue with a trading algorithm being run by one "institutional trader," which may indicate an investment fund of some sort. "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," Binance.US told 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." It's entirely possible that some lucky traders were at the right place at the right time and managed to snap up some incredibly cheap BTC, but mostly it's yet another example of weirdness along the edges of the crypto ecosystem.

Re: Slow News Day?(*)

[guruevi]

It was $55k a month ago and you said the same thing about it scraping back down from $60k. You said the same a few months ago around $45k and $30k all the way down to $5.

In other news, my energy investment appreciates by 500% hourly!

Re:

[Joce640k]

Look, as much as I revel at trashing bitcoin and its bros, this isn't even a fucking story.

Gotta keep Bitcoin in the headlines. Bitcoin will crash and burn without constant headlines.

Accustomed yet much?

[delirious.net]

Apparently, people, but foremost, systems, are not fully accustomed to full potential yet when it comes to trading crypto, it seems.

No I won't. ever, invest in crypto.

I'll rather stay poor, drinking wine, eating meat whenever I want, like a king of the old ages. But then everyone around me too.

Anyway.

cheers.

The point I realized how crazy crypto is

[rsilvergun]

is when Tether revealed they lied about having $1 to 1 coin and the entire market didn't crash.

Tether coins are created and used primarily to buy other Crypto currencies. They're a means of quickly getting into crypto, and were supposed to be a secure way to do so.

It's just be revealed that they're more or less a pyramid scheme, where coins are minted without backing and where the whole thing could, like any other crypto currency, crash at any moment. This was suspected, but they just settled with t

So a single institutional investor

[rsilvergun]

can crash the price of Bitcoin by 87%. Good to know.

Re:

[reanjr]

No. A single institutional investor can crash the price of Bitcoin on a single exchange which isn't even the largest exchange in its own country.

Re: So a single institutional investor

[StigNasty]

correct. It was only on Binance. The âcrashâ(TM) lasted for under a minute, with the price going right back to where it was before the minute was finished. Also⦠whoever this institutional investor is, tipped everyone off as to whet they're holding. The same price movement happened at the same time on a few cryptocoins.

Re:

[rsilvergun]

It's funny that you think they couldn't do this on the other exchanges. Seriously, this was a dry run. Bitcoin it prone to currency manipulation by big players, just like any other unemployment unregulated security.

Re:

[Jeslijar]

That's not at all what happened here. One big investor had a traging algorithm that caused just their shares to be sold for $8,200. I'm sure that one investor is absolutely fucked, but it seems to have had no impact whatsoever to the price of bitcoin on any other trading markets. From TFA: "Because this was essentially an issue with Binance.US's order book (and one very unlucky trader), the momentary price crash was not replicated elsewhere and Bitcoin continues to be expensive as hell. "

Not really different than the Citibank accident

[FuzzMaster]

“Money Stuff: Citi Can’t Have Its $900 Million Back” - https://www.bloomberg.com/news... [bloomberg.com]

It was an accident and the investor is out of luck. A bunch of traders had limit orders in place at the lower price points “just in case” and the investor’s “algorithm” issued market sell order that cleared the order book on the exchange. The bug was in the client’s code. This was on one exchange and had minimal impact on the larger bitcoin market.

Re:

[shentino]

That was different, the only reason it couldn't have the money back is because it already owed the money. Nobody lost anything they weren't already on the hook for.

Playing with fire

[NoMoreDupes]

From the article:

Because this was essentially an issue with Binance.US'ser book (and one very unlucky trader)

That trader should've known better than to play with a volatile substance on fire!

Dunno if I'd call it a bug

[93 Escort Wagon]

Unless you consider an outbreak of common sense to be a bug?

Not surprised

[Team Rocket Elite]

As soon as the price passed 65535, I knew something was going to go wrong.

I was being kind of facetious...

[thegarbz]

When in the previous Bitcoin story I posted "I have a pretty good idea of what the USD will be worth at the end of the year, but no idea what Bitcoin will be worth tomorrow"... *facepalm*

bullshit

[etash]

the whole article is a lie. first of all binance is not the biggest exchange in the world, that'd probably be coinbase or ftx.

secondly, all minor exchanges (like binance, bitstamp, bitmex etc.) have been losing customers to the fastly rising since two years FTX, leaving them with very few users and very low liquidity. And that is the reason of the flash crash, not some cheap excuse like "a trading algorithm bug". the "trading algorithm bug" was that someone fat fingered sold a lot of btc, that is not a b

Re:

[meisdug]

This wasn't the real Binance. This was Binance.us, the very small exchange with minimal liquidity that US users are forced to use.