Cryptocurrencies
How Crypto Exchanges Could Stop Flash Crashes If They Wanted To
- Bitcoin briefly plunged 87% on Binance’s U.S. exchange
- Circuit breakers, trading bands, ‘fat-finger checks’ can help
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The cryptocurrency business has a lot to learn from stocks about preventing crashes.
Eye-catching, mistaken plunges are not unusual in crypto. In June 2017, Ether had a harrowing 45 milliseconds that took its price down to 30 cents -- a 99.9% loss. This week, it was Bitcoin’s turn to flash crash: The biggest cryptocurrency dove to $8,200 within a single minute on Thursday from around $65,000 on Binance’s U.S. exchange after an institutional trader’s algorithm encountered a bug and cratered the price.