That’s why Bitcoin crashed to $ 8,200 on Binance.US

Yesterday, the price of Bitcoin temporarily dropped from $ 65,820 to $ 8,000 on Binance.US.

This is a mind-boggling loss of 87%. The cryptocurrency erased these losses within a minute.

Bitcoin underwent a brutal correction on Thursday, but only on Binance.US. In particular, the exchange printed a one-minute candle, which caused an 87% decline as the price of the cryptocurrency reached $ 8,200 with a trading volume of 592 BTC.

Sudden crashes are a common occurrence in crypto and traditional markets. However, the scale of the collapse of Binance.US drew the wrath of the cryptocurrency community, with one trader noting:

This type of nonsense just doesn’t have to happen. It is not fair for some to be [ударят стопове на позициите си]and others to stay, some to be filled [чакащите поръчки]and others do not.

The collapse of Binance.US did not affect the price of Bitcoin in the wider market. On other major spot exchanges, the price of the asset fell to about $ 64,150. Despite attempts to recover, it failed to regain its levels and continued to fall, currently trading at $ 62,600 according to data from CoinMarketCap.

Some observers speculate that the low liquidity is responsible for the collapse of the US subsidiary of the leading cryptocurrency exchange.

“This morning http://Binance.us crashed with a lack of liquidity. $ BTC fell to $ 8,200 in 1 minute. I explained why on Youtube (not a mistake; according to a confidential source).

Good [поучителен момент] for stock exchanges. (PS: It doesn’t affect my bull’s mood for $ BTC; just a failure of the exchange). “

But according to Binance.US, the crash was caused by an error in the trading algorithm of one of its institutional clients. In a statement shared with Bloomberg, the exchange said:

“One of our institutional traders told us that there was an error in his trading algorithm that seemed to have caused the sell-off.”

The stock exchange says they are still investigating the matter, but the trader in question has rectified their mistake, thus solving the problem.

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It is currently unclear whether some retailers have suffered losses from the collapse and if so, whether Binance.US intends to compensate them.