Bitcoin Flash Surge To $50K – USDC De-Pegging Triggerd BTC Price on Binance

The cryptocurrency market remains volatile as Silicon Valley Bank’s collapse prompts another wave of panic among traders. This time, the depeg of USD Coin (USDC) from the U.S. dollar triggered a flash surge in Bitcoin (BTC) prices on Binance.

BTC Flash Spike on Binance

On March 12, around 7:00 pm UTC, the BTC/USDC pair on Binance experienced a flash spike to $50,000, despite the market spot price being around $22,000. The reason behind the surge is unknown, but it was likely due to a “fat finger” trade of a large order.

Thin Order Books and Crypto Twitter Reaction

The potential reason for the flash spike is likely due to the thin order books for the newly launched BTC/USDC pair on Binance. A trader on Crypto Twitter suggested that a Bitcoin market order ate through the limit sell-orders on the pair up to $50,000.

The trading price of the pair returned to the market spot price of around $22,000 within minutes after the spike, suggesting it was an isolated incident. However, flash crashes and spikes are not uncommon in cryptocurrency exchanges, and they have incited anger and refund requests from affected customers in the past.

USD Coin’s Depeg from U.S. Dollar

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 Silicon Valley Bank (SVB). Since the SVB revelations, USDC trading pairs have been unstable on other exchanges as well.

At press time, BTC is worth $22,359, and USDC is at $0.99. It is unclear whether the depeg of USD Coin from the U.S. dollar will continue to cause volatility in the cryptocurrency market. Nonetheless, traders should stay vigilant and watch out for potential flash crashes or spikes.