Tanahub.com — The price of Wrapped Bitcoin (WBTC) on Binance experienced a sudden drop to $5,200 on November 23, 2024, around 9:00 PM WIB. This incident, known as a flash crash, occurred briefly and did not affect the price of WBTC on other exchanges.
According to Cointelegraph, WBTC initially traded at its normal range of around $98,000, aligning with Bitcoin (BTC) prices. However, an electronic system malfunction on Binance’s trading platform caused the price to plunge sharply. Such events are often triggered by trading algorithm errors or momentary liquidity pressures.
The WBTC price quickly returned to its normal level following the incident. Binance reported that the daily WBTC price rebounded to around $97,000, close to the market price, based on the latest data.
This flash crash occurred just days after Coinbase announced plans to delist WBTC from its platform. In a statement on November 19, 2023, Coinbase declared it would cease trading of WBTC starting December 19.
Coinbase cited WBTC’s failure to meet its listing standards as the reason for the delisting. However, the announcement did not specify the exact standards in question. This decision is speculated to be related to controversies surrounding WBTC issued by BitGo, particularly after BitGo partnered with BiT Global, an entity associated with controversial crypto billionaire Justin Sun.
BitGo previously announced its plan to transfer WBTC management to a joint venture with BiT Global, where BitGo would only hold a minority stake. This raised concerns about the potential influence of Justin Sun, known for stirring controversies in the crypto space. Some DeFi protocols, such as Sky, even halted new lending activities using WBTC as collateral.
Meanwhile, Coinbase launched its own synthetic Bitcoin, cbBTC, in September. Within a short period, cbBTC captured nearly 10% of WBTC’s market share in the DeFi ecosystem, with a market capitalization reaching $1.3 billion. This success indicates a shift in the dominance of the wrapped Bitcoin market, with cbBTC emerging as a significant competitor.
The WBTC team expressed disappointment with Coinbase’s decision. They emphasized that WBTC adheres to strict governance and compliance standards, including asset custody and on-chain verification processes. They urged Coinbase to reconsider the delisting decision and stated their readiness to provide additional supporting information if needed.