• Bitcoin returned to parity in 10 minutes with other exchanges’ euro trading pairs.
  • Flash crashes can be attributed to lack of liquidity, or “fat fingers” trading.

BTC Price Index and Live Chart – CoinDesk”>(BTC) lost 23.7% of its value against the euro on Coinbase (COIN) Tuesday during the period of high volatility that followed the crypto’s surging to a record U.S. dollar high of $69,325.

BTC dropped from EUR60,000 to EUR48.529 on Coinbase. On Kraken, however, the price was only EUR58.400. The cause of the flash crash is still unknown, and it took ten minutes for the price to return to parity.

Flash crashes are usually caused by a number of factors. One of these is a lack in liquidity. This means that the market sell orders were too large compared to the resting buy order volume on the order books. The price then needed to drop to the next point where there was an adequate bid.

A mistake or bug made by a trader, or an algorithm is another reason. This is often referred to as a “fat-finger” trade.

The disparity in euro trading pairs was evident shortly after bitcoin reached a record-breaking high of $69 325 in U.S. dollars and then reversed its gains within minutes, sliding down to less than $64,000.

CoinDesk did not receive a response from Coinbase immediately after requesting a comment.

Stephen Alpher edited the book.