The panic caused by the depeg of USD Coin (USDC) from the US dollar was realized in the wrong order, the price of traders $ 50,000 per Bitcoin (BTC), even for a few minutes.
Bitcoin price sees $50K in “fat finger” error.
The BTC/USDC pair on Binance flash spiked to $50,000 on March 12 around 7:00 pm UTC. The reason for the surge in impulse is unknown and may be due to “fat finger” trading with large orders.
The potential reason for the flash spike is likely due to the thin order book for the newly launched BTC/USDC pair on Binance. The exchange listed the pair just hours before the impulse price hike.
according to for traders on Crypto Twitter, it is possible that the order of the Bitcoin market eats through the sell-order limit in the pair up to $50,000.
The pair’s trading price returned to a market price of around $22,000 in the minutes following the spike, suggesting that the incident was an isolated incident. Fortunately, the futures market remains unaffected by the BTC/USDC spot pair; otherwise, it could have triggered massive short-side liquidations.
But this isn’t the first time cryptocurrency exchanges have seen crashes and flash spikes. Many exchanges in the past have had similar issues, prompting outrage and refund requests from affected customers.
Related: Deribit pays users $1.3M after Bitcoin price ‘flash crash’ to $7.7K
In August 2017, a flash crash on GDAX, now called Coinbase Pro, saw the price of Ether (ETH) drop to $0.1 due to a customer error. Ether was trading at around $300 elsewhere at the time.
USDC stablecoin peg recovered
The value of USDC fell to $0.87 on March 11 after Circle, the USDC issuer, disclosed that it had $3.3 billion of exposure to the defunct Silicon Valley Bank (SVB).
The USDC trading pair has been volatile on other exchanges since the SVB revelations. On March 11, the BTC/USDC pair on Kraken surged to over $26,000 due to concerns about the collapse of the USDC.
At the time, USDC was trading at a 10% discount, which would have cost Bitcoin around $22,200. However, the surge to $26,000 shows that panic is causing serious volatility.
Fears grew over the weekend due to uncertainty over the fate of SVB depositors. In response, the United States Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation decided to bail out the customers of SVB and Signature Bank but not the shareholders and other stakeholders, restoring market confidence today.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.