Bitcoin experienced double-digit losses today with a rapid descent that saw the leading cryptocurrency briefly fall below the $8,000 price point. The sudden sell-off led to a cascading effect on the BTC/BUSD pair on Binance which saw BTC flash crash to $1800.
Recently Binance released a stablecoin Binance USD (BUSD) which has been trading on the exchange for a few weeks now. The stablecoin, backed by both Binance and Paxos, is currently suffering from low liquidity, though, and experienced a flash crash on its BTC trading pair.
BTC/BUSD Drops to $1800
At around 20:00 UTC, the BTC/BUSD trading pair suffered a major sudden crash and someone ended up purchasing BTC for $1800. The books were too thin to account for Bitcoin’s double-digit losses today.
Currently, the BTC/BUSD pair has a very low trading volume compared to other stablecoin-BTC pairs, only trading around $600,000 in the last 24H. Still, it seems that Binance had no stops in place to stop this flash crash to $1,800 which was likely amplified by trading bots.
Some exchanges have in the past experienced flash crashes, but such events on BTC trading pairs for major exchanges are rare even against less liquid stablecoins. This is what makes the drop on BTC/BUSD all the more surprising.
Binance Coin Posts Double-Digit Losses
Binance’s Coin (BNB) has not been spared from Bitcoin’s sudden drop either. The exchange’s token is currently trading at around $16.66 and is down some 15%. This slow bleed has spiraled into a complete crash. Just a week ago, BNB was trading for close to $23.
As of now, Binance has not made any official statement on the flash crash or whether it will look into the situation. The BTC/BUSD trading pair has since recovered and is trading at $8,710 at the time of writing.
Do you believe Binance should have mechanisms in place to try to better prevent these kinds of flash crashes? Let us know your thoughts in the comments below.
Images are courtesy of Shutterstock, Binance.