Bitcoin price suddenly fell 87% on the Binance exchange due to an algorithm problem

Bitcoin price suddenly fell 87% on the Binance exchange due to an algorithm problem

Bitcoin price fell rapidly 87% on the US exchange Binance on October 21, falling from $ 65,000 to $ 8,200 USD. Bitcoin price has never crashed like this on other exchanges. Currently the price is at the level of around 65,000. returned USD on Binance.

“One of our institutional traders told us that he encountered a bug in his trading algorithm – which appears to have triggered the sell-off,” Binance said in a statement. “We are still investigating this issue, but once these dealers fix the problem, it appears that the problem will be resolved.”

The sudden drop occurred at 7:34 a.m. on October 21, New York time, according to Binance. The trading volume at the time was 592.8 Bitcoin – worth almost 40 Million dollars at $ 65,000 / bitcoin.

Incidents like these often happen in the financial world, for example when traders set the wrong price or order size, or encounter algorithmic errors. A large trade can overwhelm the order volume on the exchange, which leads to a quick and strong sell-off. The US stock market was famous for its flash sell-off in May 2010.

This is the latest in a series of trading problems in the cryptocurrency market. Synthetify – a newly formed decentralized exchange – had to close for some time this month shortly after it began to experience problems with the data provided by Pyth Network.

Vu Hao (according to Bloomberg)