Bitcoin is on a tear, reaching an all time high price of $67,000 for 1 BTC on Wednesday, buoyed by a series of approvals for Bitcoin futures funds on the stock market. But on one major U.S. exchange, the price flash-crashed 87 percent to roughly $8,200 on Thursday due to a bug in a trading algorithm.
The crash occurred during a massive sell-off on the Binance.US exchange that occurred around 7:42 a.m. ET, Bloomberg reported. Binance is the largest cryptocurrency exchange in the world, and its Binance.US exchange is meant to be compliant with U.S. regulations, although it is still banned in several states.
According to a Binance.US spokesperson, the crash was due to an issue with a trading algorithm being run by one "institutional trader," which may indicate an investment fund of some sort.
"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,” Binance.US told Bloomberg. “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.”
Because this was essentially an issue with Binance.US's order book (and one very unlucky trader), the momentary price crash was not replicated elsewhere and Bitcoin continues to be expensive as hell.
It's entirely possible that some lucky traders were at the right place at the right time and managed to snap up some incredibly cheap BTC, but mostly it's yet another example of weirdness along the edges of the crypto ecosystem.