Binance’s $5K WBTC Flash Crash: What’s Behind the Chaos?

Crypto News Altcoins

Binance’s $5,200 WBTC Flash Crash: What’s Behind the Chaos?

Written by Aaron S.,

Editor-In-Chief

Last Updated: November 25, 2024

Key Takeaways

Wrapped Bitcoin briefly plunged to $5,200 on Binance due to an electronic trading glitch;
Coinbase plans to suspend WBTC trading on December 19, 2024;
WBTC’s transition to multi-jurisdiction custody has fueled debate, coinciding with the launch of Coinbase’s cbBTC product.

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Binance’s $5,200 WBTC Flash Crash: What’s Behind the Chaos?

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On November 23, Wrapped Bitcoin WBTC $90,576.38 experienced a price drop to $5,200 on Binance $7.63B , marking a flash crash exclusive to the platform.

Starting the day at its valuation of around $98,000, WBTC's price collapsed due to what appeared to be an electronic malfunction in Binance's trading system. Flash crashes, usually triggered by technical errors, have caused similar market disruptions.

Fortunately, the token’s value rebounded almost immediately, closing the daily chart at approximately $97,000. Currently, WBTC continues trading at its regular market price without any residual instability from the incident.

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This event happened only days after Coinbase $1.62B disclosed plans to delist WBTC. The announcement, made on November 20, specified that trading for Wrapped Bitcoin would cease on December 19, 2024, at around 12 PM Eastern Time.

The decision has not been without controversy. BiT Global, the entity managing WBTC custody, claimed Coinbase calculated the delisting to prioritize its own wrapped Bitcoin variant, cbBTC.

Coinbase introduced cbBTC in September 2024 despite heated debates over Wrapped Bitcoin's transition to a multi-jurisdiction custody framework. This new arrangement distributed control of the private keys backing WBTC across the United States, Hong Kong, and Singapore.

The crypto space is no stranger to technical glitches, as seen with the WBTC flash crash. But disruptions aren't limited to tokens—entire networks can face challenges, too. Recently, a blockchain dubbed the "Solana killer" experienced a major outage. Can the Sui Network recover? Read the full story.