- Bitcoin plummeted to $US8,200 ($AU10,991) on Binance’s US platform, Cointelegraph first reported.
- The brief decline in the cryptocurrency was an 87% fall from $US65,815 ($AU88,216).
- Binance’s CEO tweeted: “Expect very high volatility in #crypto over the next few months.”
Bitcoin briefly plummeted to about $US8,000 ($AU10,723) on Thursday – but only on the Binance US trading platform.
The coin had been trading around $US65,000 ($AU87,124) when Binance US posted a candle that showed the price sank to about $US8,000 ($AU10,723), Cointelegraph first reported, adding that the coin’s one-minute candle floor on other crypto platforms was about $US64,000 ($AU85,783).
In an email to Insider, the company said: “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. 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.”
On Twitter, CEO Changpeng Zhao said to “expect very high volatility in #crypto over the next few months.”
Discussions around the drop trended on Twitter, with crypto traders posting photos of Binance US’s bitcoin candlestick chart, a graph that tracks patterns in price movements, and calling it a scam.
The account @Crypto_Chase, which has more than 55,000 followers, said: “Well done Binance US.” The account added that Americans were forced to use poor exchanges where they “can get completely scammed on unreasonably thin books.”
CNBC previously reported the price of bitcoin and other cryptocurrencies could vary from exchange to exchange because of the difference in supply on big platforms to small platforms. On top of that, there’s no set way to price bitcoin, CNBC said.
Valuing bitcoin, along with other cryptocurrencies, has remained a challenge for markets. Compared with stocks, where investors have many standardized ways to value companies, like price-to-earnings ratios, the methods for cryptocurrencies aren’t nearly as structured or well known yet, Insider reported previously.
Bitcoin has been trading around record highs this week on investor hype regarding regulator approval for the first bitcoin-linked exchange-traded fund. On Wednesday, the cryptocurrency hit an intraday peak of $US66,976 ($AU89,772).