Turmoil by USD Coin (USDC) increasing from the US dollar in an irregular order, market traders $50,000 per Bitcoin (BTC), albeit for several minutes.
Bitcoin Price Sees $50,000 Through ‘Thick Toe’ Error
The BTC/USDC pair spiked to $50,000 on Binance on March 12th around 7pm UTC. The reason for the spike in importance is unknown and was likely due to “thumb” trading of a large order.
BTC/USDC hourly price chart on Biance. Source: TradingView
A possible reason for the surge is likely the lack of order books for the recently launched BTC-USDC pair on Binance. The exchange rate was only a few hours before the price boosted.
According to a * Crypto trader on TwitterIt is likely that the order of the Bitcoin market would exceed the limit of selling orders in pairs up to $50,000.
The price of the pair returned to trading at around $22,000 a minute after the spike, indicating that this is an isolated case. Fortunately, the BTC-USDC futures market was not a spot match; otherwise, it could trigger massive selloffs.
But this is not the first time that cryptocurrency exchanges have experienced sudden crashes and spikes. Many exchanges have had similar issues in the past, prompting anger and refund requests from affected customers.
In August 2017, a crash on GDAX sent ETH lead prices as low as $0.1 due to a customer error. Ether was trading around $300 at the time.
USDC Stablecoin Peg Recovers
The value of USDC fell to a low of $0.87 on March 11 after Circle, the issuer of USDC, revealed that $3.3 billion had been deposited into the US bank of the Dead Valley Silicon Valley.
USDC pairs are traded on other exchanges with SVB disclosures. On March 11, the BTC/USDC pair on Kraken was pegged above $26,000 on fears of a USDC collapse.
At the time, USDC was trading at a 10% discount, which cost Bitcoin around $22,200. However, a rally to $26,000 indicates that the alarm will cause severe volatility.
Fears were heightened over the weekend due to the uncertain fate of SVB bank depositors. In response, the US Treasury, the Federal Reserve, and the FDIC bailed out SVB and Signature Bank customers, but not shareholders and other stakeholders, to restore market confidence in the interim.
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