Bitcoin experienced an extreme crash today, dropping to $8,200 on Binance’s US platform. This decline was an 87% fall from $65,815 and was only brief before the coin climbed back up again. The crash comes after Binance’s CEO tweeted “Expect very high volatility in #crypto over the next few months.”
The brief plummet only occurred on the Binance US trading platform. Previous to this, the coin had been trading at around $60,000 on the platform before Binance posted a candle that showed a price sink to around $8000.
Binance has yet to comment on the drop yet CEO, Changpeng Zhao took to twitter to warn traders of the expected volatility.
An email, sent to Bloomberg, from 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.”
The Bitcoin drop fast became a trending topic on Twitter, with traders posting photos of Binance’s Bitcoin candlestick chart, calling it a scam.
One account @Crypto_Chase, with more than 55,000 followers, tweeted “Well done Binance US.” Adding that Americans were forced to use poor exchanges where they “can get completely scammed on unreasonably thin books.”
Various media outlets have warned of volatility regarding the price of Bitcoin and CNBC has previously stated that the coin could vary from exchange to exchange because of the difference in supply on each of the platforms. There is also no set way to price Bitcoin.
Valuing cryptocurrencies is a major challenge for markets. Traditional stocks have standardized ways to value companies such as price-to-earnings ratios. The methods for valuing cryptocurrencies are not as structured yet and needs some work.
Bitcoin has been trading at record highs this week, hitting $66,976 on Wednesday. This followed from the launch of the first Bitcoin-linked exchange-traded fund.
