Bitcoin price flash spikes to $50K on Binance after USD Coin peg snaps
The panic caused due to USD Coin's (USDC) depeg from the U.S. dollar manifested itself in a wrong order, costing traders $50,000 per Bitcoin (BTC), albeit for several minutes.
The BTC/USDC pair on Binance flash spiked to $50,000 on March 12 around 7 pm UTC. The reason for the impulse spike is unknown and was likely due to a "fat finger" trade of a large order.
The potential reason for the flash spike is likely thin order books for the newly launched BTC-USDC pair on Binance. The exchange listed the pair only a few hours before the impulse price surge.
According to a trader on Crypto Twitter, it is likely that a Bitcoin market order ate through the limit sell-orders on the pair up to $50,000.
The pair's trading price returned toward the market spot price of around $22,000 in a minute following the spike, suggesting this was an isolated incident. Fortunately, the futures market remained unaffected by the spot BTC-USDC pair; otherwise, it could have triggered massive short-side liquidations.
But this isn't the first time cryptocurrency exchanges have seen flash crashes and spikes. Multiple exchanges in the past had similar issues, inciting anger and refund requests from affected customers.
Related: Deribit to Pay Users $1.3M After Bitcoin Price ‘Flash Crash’ to $7.7K
In August 2017, a flash crash on GDAX saw ETH prices plummet to as low as $0.1 due to a customer error. Ether was trading around $300 at the time.
USDC's value dropped to lows of $0.87 on March 11 after Circle, the issuer of USDC, revealed that it had $3.3 billion exposure to the defunct U.S. bank, Silicon Valley Bank.
USDC trading pairs have been unstable on other exchanges since the SVB revelations. On March 11, the BTC/USDC pair on Kraken spiked to over
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